Let’s go to the Treasurer, Scott Morrison. Many thanks for your time, Treasurer.

TREASURER:

G’day Ross.

GREENWOOD:

Ok, does this mean that your company tax cuts now are effectively, politically, dead in the water?

TREASURER:

I have heard that prediction a few times and so I wouldn’t share it but let’s see what happens over the next few weeks. The key point is that the tax cuts for business already have started now. We started them back in 2016 when we provided the tax relief for small businesses when we moved that threshold up from $2 million to $10 million in turnover. Then it’s gone up to 25 and it’s going up to 50. So, the tax plan to make businesses more competitive on tax is already under way. We are doing it that way because that is how you can do it and the Budget can support it over time. If you are a larger company those more competitive rates don’t come in for a number of years yet. What companies looking to invest in Australia can do is they can look down the next ten years and see, that is where the tax rate will be and I can invest on that basis. That is why it has been done that way.

GREENWOOD:

Doesn’t Pauline Hanson, her lack of support now give you a little bit of wriggle room to say alright we can keep the money, we can stick it towards paying down the national debt. We can actually drive the Budget back into surplus quicker than what we have even forecast. Couldn’t you actually look at this in an entirely different light?

TREASURER:

Well, first of all, the cost – I shouldn’t say the cost because it’s not a cost, it’s their own money that they would be able to retain in these businesses – for the tax relief that is not yet legislated, that is about $35 billion over that 10 year period. The balance has already been legislated for companies less than $50 million. What it would mean just over the next four years is only about $1.3 billion. In the scheme of things when it comes to providing significant tax relief in other areas, that proportionately is not a big sum. Over the ten years though it is obviously a much bigger figure and that is right but over the next few years it wouldn’t have a big change to what we are seeing on the deficit. And as you know the deficit turns into a balance in 2019-20. Where this goes in the Senate still I would say, let’s just see what happens. Until people sit down on one side of the Senate or the other in terms of how the vote is taken, that is how we will know, ultimately, where the Senate sits on this. So, we will continue to make our case as we have now for two years.

GREENWOOD:

It comes down to politics as well and where One Nation preferences go. I notice that even Mathias Cormann, Finance Minister, referred to this today. Here is what he had to say:

FINANCE MINISTER: Any agreements that we may or may not have reached with One Nation In relation to all of these matters are contingent on the successful passage of this legislation through the Senate. Looking at the front page of The Australian today, it might well be that we won’t ever get there.

GREENWOOD:

Is that true that you may never get to an agreement with One Nation?

TREASURER:

Of course it is and then again we might. That is why I say let’s just see what happens. In terms of preferences or any of these sorts of things, Ross, there is nothing there. Absolutely nothing there – no such agreements. For those people who are listening who live north of Brisbane there in Longman, the Labor candidate in Longman who was elected at the last election got elected on the back of One Nation preferences. So, I found what the Labor Party was saying today just a little galling frankly.

GREENWOOD:

So, Pauline Hanson also says a new set of demands have emerged and she wants the Government to build a coal fired power station. This comes at the same time as members of your own party have effectively said that they wish to have competition laws amended to force AGL to sell the Liddell Power Station to Alinta. Are these all reasonable demands from Pauline Hanson and your own Party?

TREASURER:

Well, we are not into subsidising any forms of energy. If people want to build a coal fired power station, well, all power to them. I don’t have a problem with that. Obviously state governments have to approve them. We don’t have the approval powers over what people can build in states. If people want to invest in that source of energy and that power generation, then great, we don’t have an issue with that. The only issue is should the taxpayers be subsidising it when our view is whether it is renewables or any other form we should be getting out of the subsidy business not getting into it. Subsidies at the end of the day just end up in higher power prices,

GREENWOOD:

I don’t want you to subsidise a power station but why would it be if it is so important for Australia to have baseload power and it is important for Australia and its industry to basically have guaranteed power coming from a coal fired power station. Whereas we know it is intermittent energy that comes from other sources such as wind and solar. If that is the case, why would the Government not, like it does in other parts of infrastructure, simply build that piece of infrastructure to ensure there is sufficient baseload power and ultimately recycle the asset in the future? Sell it off as you might the National Broadband Network or a piece of transport infrastructure?

TREASURER:

Well, energy infrastructure is built by state governments. All the coal fired power stations you are referring to whether it is Liddell or Bayswater, or up in Queensland. They are all built by state governments and the fact that at the last state election in Queensland the LNP actually was planning to do just that and they were unsuccessful at that election. The investment we want to see going into energy in Australia needs to be sustainable over the long term and that means it needs to stand on its own two feet. So that is where I think the direction for energy investment is in the future and you get a real transparency on what the price is of those who produce our power will be able to receive. What I have noticed with a number of these proposals is that they want guaranteed prices going out over the next 20 years. Now, how would people feel 10 years from now, 20 years from now if they had to pay more for power because we had contracted to actually say we will pay you above the odds on the power you generate? So that is why it is better not to have all these distortions and all of these subsidies and to see the investment capital come into these projects and be able to realise those projects because they was their own face and they do the job.

GREENWOOD:

Ok, I want to take you also to the Royal Commission and of course this round of the Royal Commission is concentrating very much on bank guarantees and small business lending. Now, it is still a situation where there are many small businesses and individuals who have guaranteed loans, ultimately lost houses. There have been at least two examples that have come through on this. It really again does not paint necessarily a very sympathetic view of the banks and the way in which they treat customers and especially those who end up in distress.

TREASURER:

Misconduct in the banking and financial system should face penalties and as you know we have increased the penalties and are in the process of increasing them further. Five years jail time to ten years jail time for misconduct in the banking sector. We have introduced the banking executive accountability regime laws. Now, what that means is where bankers misbehave they can’t work in the sector again. Now, these are the toughest laws of anywhere in the world. We have already introduced those. They were in last year’s budget and they are already in law and the Australian Financial Complaints Authority is a new, I put it in inverted commas, ‘tribunal-like’ authority which means that people will be able to get these issues dealt with without having to fork out for lawyers and be gamed by the banks into simply trying to raise your disputes. This is the action that we are already taking.

GREENWOOD:

But the problem is when it comes to business lending, as we are even hearing these last few days, when it comes to consumer protection you can put laws in place but as we are hearing it is a very difficult thing. I will take you to one little piece, a snippet today from the Royal Commission. This is actually Michael Hodge the senior counsel who is there for the Royal Commission. He went through Westpac, really in a very forensic way to try and examine the way in which they do it. Then at the very end turned and said this.

MICHAEL HODGE: The counter-view might be, that is not the banker’s job. The banker’s job is to assess the loan and it is the borrower’s job to make a decision as to whether the borrower wants to borrow the money and start a business. And if the borrower makes a hopeless bet, that is the risk for the borrower.

WESTPAC OFFICIAL: I think in a case where the bank is lending money to them it is a risk for the bank as well. But I agree with you that the decision to invest in a small business is the decision of the small business owner.

GREENWOOD:

You as the Treasurer, and especially of a Coalition Government you want more businesses. You want bigger businesses. You want jobs created. That is a pretty natural thing to want. The problem is the imbalance of power. AS soon as anybody with a small business finds themselves in dispute with their lender.

TREASURER:

There were some very good points made in what you just played out there and that is ultimately if people decide to start a business then they have got to make some obvious decisions about that. Particularly if you are going to go and ask a family member to go guarantor on the loan. If you are going to get your Mum or Dad, or Uncle, Aunt, cousin, whoever involved in this then you have got a pretty high duty of care to them as a relative, let alone anything else to do with the business, about the risks they are taking on in doing that. Starting a business, Ross, as you know and you broadcast all the time, it is not a risk free endeavour. Now, we have heard some terrible stories about businesses going bad and people losing homes. That is heartbreaking and you need to ensure that things are fair. Equally, what we also have to be aware of, is do we want the banks to just take the ultimate risk free approach and just not lend? If banks stop lending then what do people think that is going to mean for people starting businesses or getting loans or getting jobs or all of this. In the Budget papers, the Treasury have actually highlighted this as a bit of a risk with the process we are going through. We have got to be very careful. These stories are heartbreaking, I agree, but we have to be also very cautious about, well, how do we respond to that. What is the right reaction to that is it to just throw more regulation there which basically constipates the banking and financial industry which means that people can’t start businesses and people can’t get jobs, people can’t get home loans. Or do we want to move to a smarter way of how this all is done and I think in the era of financial technology in particular there are some real opportunities there. We are going to continue to listen and carefully respect the Royal Commission, not prejudge the findings, but be very careful about any responses that are made because this can determine how strong an economy we live in over the next ten years and whether people get jobs and start businesses.

Good morning and welcome everyone here to the microbiome research centre here in Kogarah in the heart of Southern Sydney. It is great to be here today to talk about medical research and in particular the microbiome research centre based here at St George Hospital. The Government has provided $4 million in funding for this centre and it is a very important investment in the future of medical research here in Southern Sydney. Just chatting with some of the researchers this morning and the comment was made that this centre is becoming a magnet for medical research in Southern Sydney and that is very good news for our community here in this region. What I'll do now is hand over to Professor Emad El-Omar who is the head of the centre to make some remarks about the important work that is being done here.

PROFESSOR EMAD EL-OMAR:

Good morning. Thank you very much David. It is a great pleasure to be here to talk about the micro biology centre. It is something that we have set up with the support from the Federal Government. We are very grateful for that. It allowed us to set up a centre that deals with one of the most exciting developments in medicine which is the microbiome. The microbiome [inaudible] the trillions of bugs that live on us and within us and have a major impact on our health. We are able to put together a research program that utilises the best available science. It is inspired by our patients, it's inspired by our clinical needs. We do our best to take this to the laboratory and then from the laboratory back to the patients. So, ultimately we hope that the vision of the MRC will be a collaborative interaction with all of our colleagues across Sydney, across the nation and across the world to try and make benefits that goes back to our patients.

TREASURER:

Thanks Emad. Well, it is great to be here with Emad and with David Coleman, the Member for Banks. We are very pleased to be here at southern Sydney together. St George and Sutherland Hospital across the river there is where our communities go. I particularly want to commend the state government for the work they have been doing here on St George and Sutherland Hospital and the increased investment they have put in here, the Berejiklian Government, to really improve the standard of care and support we are seeing at both the Sutherland Hospital and the St George Hospital. But that's not why we are here today. Why we are here today is this microbiome research centre.

Australia is an amazing country and we are an amazing country because of the economy we have built and we continue to build to make it stronger so we can invest in industries like this. I refer to it as an industry. This is Australia's medical industry that you are seeing here. Australia's medical industry will be an important employer of Australians into the future. In the Budget we announced our 21st century medical industry plan. That includes half a billion of investment into genetics and the genome project. Now, I am reliably informed by Emad and the other scientists and researchers here that when it comes to microbiome – these are the bugs in your guts – these are the things that can determine so much of your health. The genetic make-up of those are actually things that you can influence as opposed to what is part of your own genes.

So, the research that is going on here is transforming medicine, it's transforming how people can live healthier lives and live longer, healthier lives. That's important from a health perspective and that's why we have supported this project here to the tune of $4 million. But as part of a broader 21st century medical industry plan, which is investing in scientific collaboration, which is investing in research, which is investing in new diagnostic tools, investing in the development of new medicines and clinical trials – all of this is actually establishing and building a new and vibrant medical industry.

14 per cent of the jobs that we're seeing in our economy today are actually in the health sector. Yesterday, we marked more than one million jobs that have been created since the election of the Coalition Government back in 2013. A big driver of those jobs, particularly more recently, has been in health. When you look at industries that drive Australia, of course we're very well aware of our agricultural sector and what that has meant over centuries and in the mining sector. These have been sectors that have been very important to our economy. You don't need to don the miner's hat to know the mining industry is important to the Australian economy. But it is similarly true that you don't have to wear a white coat, a lab coat here like those working in this facility to understand that if the medical industry continues to grow and expand and lead the world in areas like we are here in microbiome research or in genome research, where we are investing, that that will also bring great benefits of an expanding industry of real commercial application, generating income, creating jobs.

That's what this Budget is doing, it's creating a stronger economy to support the essential services that are also provided right here at St George Hospital and Sutherland Hospital, the Pharmaceutical Benefits Scheme, all of the drugs and other things that actually come out of the sort of things we're investing in the research side, then made available to Australians by a stronger economy. So I want to commend the institute here for the tremendous work they do. I, as a local member from across the river, in fact just across the road here, and together here with David Coleman as the Member for Banks but also the Assistant Minister to the Minister for Finance, we're very excited about this project and the support we have been able to provide here.

It is about creating a stronger economy. The research that is going on here is all about our plan for a stronger economy, to guarantee the essential services that Australians rely on. Happy to take questions, as is Professor Emad and John and others. If I could ask you, before we go to other questions of a more political nature, why don't we just focus on the issues we're here talking about first and then we can go to the others. Questions about your guts? It's a fascinating topic. You'd be surprised to know. We are at gut central here in St George today, in Kogarah, and very proud to be part of gut central here in southern Sydney. It is an exciting area.

QUESTION:

How important is it for Australia to use new technologies and be on top of that new technology bandwagon when it comes to health?

TREASURER:

Professor Emad would you like to make a comment on that?

PROFESSOR EMAD EL-OMAR:

This is incredibly important because countries where there is investment in research, this translates back into health benefits and also translates into commercial opportunities and engagement with industries is very important to sustain this drive towards excellence and development in research. I see the two as being so interlinked it is a no brainer to go for this.

TREASURER:

The ecosystem that's been created here between scientific researchers, clinicians, academics, the business community and actually being attached to an actual hospital treating actual patients, this is the sort of thing we have seen overseas that has transformed their own medical industries. Earlier this year I was at the Texas Medical Centre in Houston. That is one of most phenomenal cohabitations of every form of medical practice, science, research, treatment, clinicians of anywhere in the world. That has put them in an incredible position and the amount of jobs it has supported in Houston as a result of that Texas Medical Centre, it blows you away. So, the eco-system, the scientific commercial collaborative ecosystems that have been created through centres like this is why we are investing into them. We want to see them grow and we want to see them build and the wonderful people who are working here have come from all sorts of different backgrounds. Some trained here locally at the University of New South Wales and Sydney University. Others from the UK. Howard there, he is from Hong Kong. He is bragging to his mates about the wonderful research here as well as the wonderful lifestyle and beaches of southern Sydney.

QUESTION:

Are we happy to move onto other issues of the day?

TREASURER:

If there are no other questions on this I might get Professor Emad and the others to take their leave, I'm happy to take other questions.

QUESTION:

Just on the Budget, one of the key factors to ensure those circumstances as you say is the reliance on wage growth. But we have had some really stagnant wage growth activity happening. How can the public trust that we will have those certainties [inaudible] if that wage growth remains stagnant?

TREASURER:

Well, first of all the commentary I've seen on that massively overstates the impacts of those out-year forecasts. They're talking about forecasts in 21-22. The balance comes in in 2019-20. That is one point. The Budget forecasts on revenue are particularly driven by what's happening with nominal GDP and what is particularly driving that and what is driving a lot of the income is actually people getting in jobs. Regardless of the wages being paid, where we have seen real growth in the last year or so has been the increase in what is called the compensation of employees in the national accounts. That's the total wages bill, that's everybody who is in a job. When you have more people in a job then that actually lifts the Government's revenue because they're paying taxes and not receiving welfare cheques.

So, while the wage price index, I acknowledge and have for a long time, is moving at modest levels and we want to see that improve and we believe it will improve. One of the interesting things that was pointed out by one of the economists yesterday is when you take into account what is increasingly happening at the moment is sign-on bonuses for people going into new jobs. So there is wage and a sign-on bonus that comes on that. Bonuses are paid by many organisations including the ABC, it turns out. What that means is when you take into account bonuses as well, particularly those sign-on bonuses for people coming into organisations where the competition for getting good people is getting tougher, that growth was actually 2.7 per cent over the course of the year.

So what actually underpins these numbers is not just one forecast on wages. The sensitivity on that is actually quite small at the end of the day in terms of what underpins the Budget forecasts. The Budget forecasts have been well received. Our Budget forecasts on growth are actually more modest than the Reserve Bank of Australia, more modest than the International Monetary Fund and in fact it has been a set of forecasts that has been better received than any that I can recall. It was our predecessors who used to bank on iron ore prices staying at US$175 per tonne. They were banking on that and that never materialised. We have had it sitting down at $55 for a long time, underpitching where it was in the market and that is why we have been able to retain our AAA credit rating so well in recent years.

QUESTION:

How do you rate the chances of getting your full corporate tax cuts through the Senate in the coming weeks [inaudible]?

TREASURER:

Mathias Cormann leads those negotiations, as he always does with matters before the Senate. We have been involved through my team in supporting Mathias Cormann, as you'd expect us to. He has had tremendous success, $41 billion worth of Budget improvement measures and savings have been passed through the Senate since the last election alone. We remain in this discussion in the parliament and we conduct that directly and respectfully with those senators. It is always a disappointment that these measures could be quickly passed, just like many savings measures could have quickly been passed, without having to actually call on the crossbench senators to ensure the passage of Budget improving legislation and things that actually grow jobs and support growth in the economy make our businesses more competitive.

But the Labor Party is attacking business. They have $220 billion of extra taxes they want to put on the Australian economy. They don't want a speed limit on taxes. The biggest single tax they're putting on Australians that they would announce in their first Budget, if they were elected, is actually on retirees. More than $5 billion in higher taxes on retirees through ripping away their tax refunds from their share investments. They say they are hitting the top end of town but in their first Budget, over the Budget and forward estimates, they won't be getting one extra dollar out of large businesses, not one, they will be ripping it out of small and medium sized businesses and they will be ripping it out of Nanna, Nonna and Yaya with their big self-funded retirees tax.

QUESTION:

Just on getting those tax cuts through, getting those passed is it likely that you will be dealing with One Nation perhaps to get them over the line and can you rule out any changes to the immigration cap to enable that?

TREASURER:

We have got a clear view on how we set that cap and it's a cap, it's not a target and where it falls underneath that target, so be it. It did last year at 183, it wasn't 190. We will have the discussions we have with crossbenchers. We'll have those respectfully and privately. We don't conduct those negotiations through the media or respond to hypotheticals or anything like that. We make our responses directly to those members as part of those discussions. That is what you'd expect to happen. This is where, I think, we've been so successful. We don't feel the need to turn dealing with the Senate into some sort of reality television show. We deal with it respectfully and that's why we're able to get results.

QUESTION:

The Liberal Party isn't running candidates in Perth and Fremantle and hasn't yet chosen one in Longman. Is the Government planning an early election or does this show the Coalition is only worried about one part of the country and not others?

TREASURER:

I don't quite understand the question or what sits behind it. But let me say this, the Western Australian division of the Liberal Party is focusing on the state by-election and the seats held there in WA by the Labor party have always been Labor party seats and the Government is focusing its attention on some of other seats in the by-election whether it is down in Tasmania or in Longman or as you've said down in South Australia in Mayo where Georgina Downer has been selected as the candidate. Brett Whiteley is running down there in Braddon. Brett and the Prime Minister were making some good points, we are here at a medical facility here today. At the last election, in all these places, Bill Shorten went out there and told them, "you better not vote Liberal or they'll sell Medicare". It was just a lie. It turns out they were lying about the citizenship status of their actual members at the same time. They can't be trusted on this stuff. They really can't be trusted when it comes to these things. I would ask voters, in particular, in Longman and Braddon where the Labor party have the standing members, to think about that. I would ask them to reflect on that. They lied to you at the last election about that. That's their form.

QUESTION:

The Ruddock Review into religious freedoms is due to report today. What are you hoping to see coming out of that?

TREASURER:

The Ruddock Review will report in due course and the Government will consider that when it comes forward. Religious freedoms are important to all Australians. I'm sure that Philip, who both David and I know extremely well, has a deep understanding and a deep sensitivity to the issues at stake and I would expect to see that reflected in his report.

QUESTION:

Sussan Ley's private members bill, if that gets up, will that be an embarrassment for the Government?

TREASURER:

You've just made a whole bunch of assumptions that I don't intend to entertain about how that issue has been managed. What I do know is that the Agriculture Minister David Littleproud has been handling this issue very strongly, very sensitively, very carefully and very prudently. There are no kneejerk reactions from the Government when it comes to this. This is a serious issue, I know of great concern to people in rural and regional Australia as it is here and David would know in his own electorate next-door and as I do. We take it seriously but it's not something that we are going to act irrationally about. A lot of peoples' livelihoods depend on this, as does Australia's reputation when it comes to the welfare of our live stock. We take that seriously as well. The Minister has struck the right balance here in how he is managing that and what you've seen on display from him, the Government, the Prime Minister is responsible leadership in this area – very responsible leadership.

It is the same responsible leadership you are seeing in the Budget. What we have is a clear plan for a stronger economy because from that stronger economy, that's what everything else flows from. More than a million jobs have been created since we came to Government. More than a million. It's about almost six months ahead of what we promised in terms of when that would be achieved. Chris Bowen used to say, when we made that pledge, that it could never be achieved. He doesn't believe in the strength of the Australian economy or the ability of this economy to create jobs, neither does Bill Shorten. If they did, they wouldn't be seeking to suffocate it with higher taxes. We're not going to suffocate it. We will ensure that the money that people earn, whether it's here working as researchers in this wonderful institute or outside on building sites all around the country or teaching in schools or working in hospitals as nurses, we want to ensure that they keep more of what they earn. That's what our Budget is delivering for them, rewarding their effort, that's why the Budget is a strong plan for a stronger economy.

So, thanks very much Professor Emad and John Edmond for having us here today. David, it's great to be here with you here today. It is great to get such a good reception to the Budget this year. As I've moved around the country, people have seen it as a very strong plan for a stronger economy. That is what it was intended to be and I believe that is how it is being received. We are both particularly pleased to see more than a million jobs created under this Government and we congratulate all those Australians who created those jobs and went out there and got those jobs and under a Turnbull Government that will continue. Thanks very much.

Look I'm just not mucking around. This is one of my dearest colleagues. This is Scott Morrison who's our Treasurer. Very, very good with finances. If I want a project he says, "OK, you can have it out of that portfolio, then go to the other Minister and say where you're going to get it from because I'm not changing the envelope".

TREASURER:

[laughs]

SUDMALIS:

[laughs] Well-worn phrase. Treasurer, welcome to Gilmore.

TREASURER:

Well thank-you, Ann it's great to be here with you here in your town in this wonderful part of New South Wales and Australia and to have the Shoalhaven bridge in the background where the Prime Minister stood with Ann just a few weeks ago just before the Budget to announce our commitment to funding for this bridge together with the State Government, working together as a team, State and Federal Government to deliver this important piece of infrastructure. There's been, you know, a lot of great investment going into the roads by the State Government and the Commonwealth supporting further down and up here. And this is a tremendous partnership we've seen really rejuvenate the transport infrastructure around this part of New South Wales and a very important part of New South Wales. Ann has been such a tremendous hard working local member here in Gilmore, and she's well regarded by her colleagues and she's well regarded by her community. That's why she's been able to really achieve the things that we have over so many years.

And so that's why it's really pleasing to be here with Ann to be supporting her and the work she's been able to do because infrastructure is the key to creating a stronger economy. Without a stronger economy you can't support projects like the Shoalhaven Bridge. You can't support projects like supporting the National Disability Insurance Scheme and supporting the Spinal muscular atrophy and the PBS drugs, which is taking the drugs which kids and families have had to pay more than $40,000 a year for down to less than $40. That's what, that's absolutely what a stronger economy does for Australia and for the Shoalhaven. So we're pleased to be here investing in infrastructure. We're pleased to be here in New South Wales where almost $9 billion extra is going in the hospitals agreement that we have signed with the New South Wales Government. Premier Berejiklian was the first to sign up for this new agreement which is seeing $30 billion in extra funding go to hospitals all around the country. So that's what we're focused on. We're focused on a stronger economy that is delivering the essentials that Australians rely on, particularly right here in the Shoalhaven, and there's no one more important to that task here in the Shoalhaven than Ann Sudmalis so congratulations, Ann, and it's great to be here with you today.

REPORTER:

Should the Liberal Party preselect Ann Sudmalis for the seat of Gilmore?

TREASURER:

Yes, they should. But that's a matter for them. At the end of the day, we respect our grassroots process. But Ann has demonstrated that she is the right candidate here because she has won this seat in a tough contest. I mean if it wasn't for Ann at the last election, Bill Shorten would now be Prime Minister. If it was not for Ann, let me say that again. If Ann Sudmalis had not been successful here as the Liberal Party candidate at the last election, Bill Shorten would now be Prime Minister. Now if there's any better reason that local Liberals need to understand why it's important, then that's one. But, look, I know there have been some questions raised about this. We have a party where people have the opportunity to do this and we respect those, we respect those arrangements. But at the same time, you know, our party members carry a big responsibility.

QUESTION:

She's facing a possible challenge from a local man. What would your advice be to preselectors?

TREASURER:

Well, support the person in Ann who has demonstrated and delivered on the ground for her community and for the party. I mean, just recently we've just had Georgina Downer preselected in South Australia for the by-election seat in South Australia. We also, at Mayo we've already had Amanda Stoker preselected and now joining the Senate in Queensland replacing George Brandis, we've got the first female Foreign Minister, the first female Defence Minister, who's well known down in this neck of the woods, Marise Payne, and the work she has done with the local defence communities in the Shoalhaven. So you know, in the weeks ahead, and nominations I think close next Friday, I'm getting mine in too, so looking forward to having the support of my local team as well.

QUESTION:

look, just in light of the fact that the Liberal Party has been criticised for a lack of women in Parliament, do you think it would look bad if Ann Sudmalis was replaced by a male candidate?

TREASURER:

I think it would be a bad thing for the Government if Ann Sudmalis was replaced by any other candidate, and particularly a Labor candidate, and if they were to become the member for Gilmore at the next election, because a Labor win in Gilmore means Bill Shorten is the Prime Minister of Australia. That's what it comes down to. And that means the retirees' tax which will hit thousands upon thousands of people here in Gilmore, hitting them right across this country of more than $5 billion a year this retirees' tax. I mean, that's who's actually paying the extra tax under Labor. That's who's paying it. Let's make no mistake about that. If Bill Shorten becomes the Prime Minister, in their first Budget, the biggest tax item in their bag of taxes, which is pretty big, will actually be on retirees. Banks won't be paying any more over that four years. Big businesses won't be paying anymore over those four years. Hardworking self-funded retirees here in Gilmore, like all around the country, will be the biggest increase in tax payers of anyone else in the country. And so this suggestion that it's being paid for by someone else is not true. Under Bill Shorten's plan, what he's going to do is hit retirees with $5 billion and more in extra taxes.

QUESTION:

Is it true as reported… is it true as reported in the media that there is an effort among Liberals to make sure Ann Sudmalis is preselected? And if there is, how does that sit with your comments about letting democracy operate that you made in the Jane Prentice case?

TREASURER:

I'm a member of the New South Wales Division of the Liberal Party. I don't offer my commentary on other divisions. I never thought it was a good idea for Canberra to tell Queensland what to do or South Australia or, indeed, here in New South Wales. These are matters that are handled within our divisions. And my, I'm just here supporting Ann and happy to support Ann. I've supported Ann over a long period of time…

SUDMALIS:

Long time.

TREASURER:

…over a long period. As I did with Jo Gash before her. And always been happy to do that because she does a great job here on the ground so I'm making no secret of that. I'm making it really clear. But we are a grassroots Party and our preselection processes are as they are, and as I've just demonstrated, those preselection processes in South Australia and Queensland, in the case of Amanda Stoker replacing George Brandis, or Georgina Downer now contesting the seat of Mayo in South Australia. That's what our processes are about and the Party divisions actually determine those things, Tim. They're not determined by me or the Prime Minister or anyone else. They're determined by the Party Executive and the Party rank-and-file. And that's where this matter will be determined. And I look forward in the weeks ahead when Ann is re-endorsed and when Ann goes forward to the next election, you can all say "Isn't that great".

QUESTION:

Ann…

TREASURER:

I'm looking forward to your report, particularly, Tim, saying that. I think that will be a cracker.

QUESTION:

It will be. It will be.

TREASURER:

It will be a cracker.

QUESTION:

Are senior Liberals saying "Do not sack another women. Don't do that"? Is that what senior Liberals are saying?

TREASURER:

I support Ann because she's the great candidate and member for Gilmore. Just for the same reason that I thought it's great that Brett Whiteley is our candidate down there in Braddon. I think Brett's fantastic. I think Ann's fantastic. I think David Coleman, in the seat of Banks across the river from me, is a fantastic member. We've got great members on the ground and who are part of their communities. That's why they'll be supporting Ann.

QUESTION:

Are you one of the senior Liberals told Gareth Ward to back off?

TREASURER:

I haven't had a conversation with Gareth.

QUESTION:

Can the Liberal Party afford to lose a female sitting member at this point?

TREASURER:

What the Liberal Party and the Government can't afford is to hand the Government to Bill Shorten. And the country can't afford it either because the cost of that will be $220 billion in higher taxes over the next ten years. Bill Shorten Prime Minister equals all Australians pay more in higher taxes. That's what it means. You will pay more under Bill Shorten, and that's why it's so important, whether it's supporting Ann here as the member for Gilmore, underscore Federal Member elected by the people of Gilmore here in Gilmore, at the last election and the one before that. That's why it's important that we continue to ensure that we focus on putting our best foot forward and with Ann Sudmalis we're always putting our first foot forward.

QUESTION:

It's being reported that you've got a toxic relationship with Gareth Ward, is that true?

SUDMALIS:

I don't talk about friendships or otherwise in the Party, you know that. You're very familiar with that.

REPORTER:

Ann, what would your message be to preselectors?

SUDMALIS:

I've been talking to a couple of people and my message would be, and given that's not in process yet because it is not complete, is I've been doing a damned good job and there shouldn't be any reason to change the jockey on the horse. We've got a great horse, the Government's doing a phenomenal job, so why flick the jockey off? So that's my words to my preselectors.

REPORTER:

As far as people are concerned, like there does seem to be like a bit of a problem with a, I guess, public stoushes between Ann and Gareth Ward over funding for the Princes Highway, and I mean it just looks bad for the local community. I mean what can be done about that? Like shouldn't all Liberals be getting along?

TREASURER:

Well I think the best example of the dividend that has been established by the State and Federal Governments working together is right behind us.

SUDMALIS:

Yes. This is the bridge.

TREASURER:

This is the bridge.

SUDMALIS:

The bridge over troubled waters.

TREASURER:

$300 million…

QUESTION:

But how much money, how much money…

TREASURER:

…is going into this bridge to build this bridge. We're the ones who have stepped up together with the State Government to achieve that. And we'll continue to work together…

QUESTION:

But how much money is the Federal Government thrown in for all the Princess highway work, north of town? Nothing.

TREASURER:

Well I think, I commend the State Government for the work they've done, and why shouldn't we? I think the Berejiklian Government and the Baird Government and the O'Farrell Government have done a great job in answering to these needs on the south coast…

QUESTION:

Alright. Well Ann's asked, Ann's asked...

TREASURER:

So I think that's fantastic. Where Ann has been so much at the forefront is particularly on this project behind us here. And we're pleased to be able to support that. So good on the Berejiklian Government for investing in roads on the south coast and good on Ann Sudmalis for ensuring...

SUDMALIS:

Hassling the Treasurer...

TREASURER:

[laughs] …for hassling the Treasurer and the Prime Minister and the Infrastructure Minister and so on to ensure that we can secure this important funding for what is an important project.

QUESTION:

So Ann's written to the Deputy Prime Minister…

TREASURER:

Hang on, stop shouting, stop shouting.

QUESTION:

Ann has written to the Deputy Prime Minister for $1.28 billion for further works on the Princes Highway for the south. Are you going to support that?

TREASURER:

We're looking very closely at that.

SUDMALIS:

Remember, that's my job.

QUESTION:

Live exports [inaudible]…

TREASURER:

Sorry?

QUESTION:

If I might on live exports. Were you one of the senior Liberals yesterday who said this report has got to wait for a day? Because apparently it was delayed, and if so why?

TREASURER:

I don't know what you're referring to Tim I was in Rockhampton yesterday on my way back to Sydney and I was in Townsville the day before.

QUESTION:

Let me then get your response to the live exports thing because there's a big economic element to the question of live exports. Some believe it should have been halted today or at least the summer trade of live exports...

TREASURER:

Well Minister Littleproud, I think, has been handling this issue sensitively and appropriately, and he'll be the one who'll be making a response on behalf of the Government to these issues, and he has the full support of the Government in doing that. I think he's addressing it in a very patient and sober way and which I think you need to something as sensitive as this. There is a lot of feeling about this issue. That's understood. And I think he's playing the issue and going down the right course on this issue. He's doing it in a very responsible and a very measured way, a very, very measured way. And that's what's creating jobs in this country. A Government that actually takes its responsibility seriously, creates a stronger economy. You know, we've created a million jobs since we've come to Government. That's welcome. And one of if reasons we've been able to do that is because we have fantastic members…

SUDMALIS:

Thanks again.

TREASURER:

…like Ann Sudmalis, who you can see is in the warm embrace of the Turnbull Government. Great to see you! Thanks very much.

Look it's fantastic to be at Coxon's Radiators today with Julie and Gary, and importantly Treasurer Scott Morrison. So the Treasurer is up here in central Queensland, has been doing a tour of Australia talking about the Budget. Now the Budget was released last Tuesday and I think it is absolutely fantastic. There's $10 billion for the Bruce Highway. And I've been talking his ear off today about more passing lanes between Rockhampton and Mackay, which I think I'll have to take him for a drive up there one day just to show him what it's like. But another really good asset of the Budget was the $20,000 instant write off for small business. We've just been to a business breakfast and people are very excited about that. That's been extended. And it's about small business being able to buy things like another vehicle or another coffee machine or you know different sorts of tools for a business like Coxon's. I must congratulate Coxon's Radiators. It's a business that has really started from the ground up, and they're just building, and with the different tax cuts that are available within the Government that actually helps this business thrive. They've looked at innovative ways to actually to get this business up and going, and they've got major contracts with the mines, so I do congratulate them for the hard work that they've done with that.

I think it's great that the Treasurer's up here and we've been showing him around a bit to some of beautiful central Queensland. I'm telling him about the economy here. But also we have mentioned about what the State Government has been doing with the land vegetation and tree clearing, and the enormous effect that that has had on our agricultural community, which over the last couple of years has certainly been helping the Australian economy get through difficult times. So there's been a lot to talk about and I'll now hand over the Treasurer to tell you a bit more about the Budget. Thank you.

TREASURER:

Thanks very much Michelle. It's great to be here with Gary and Julie at Coxon's. The business we're at today from 1 July next year will pay less tax as a result of the legislated tax relief that we're providing for businesses in Australia to make them more competitive. They have a turnover of less than $50 million a year, and they are a business that has been expanding. They've got 35 employees. They've got two other sites, one in New South Wales and another one here in North Queensland. And they're a business that's growing, and they're a business that is growing not just in the mining sector where they've been able to continue to maintain the pace there for those enormous radiators that you would've seen. That's one of the biggest bits of equipment I've seen. But in addition to that, they're expanding into the other parts of the radiator business for more general consumer uses. So they're a smart business that's doing well and we need to make sure that they remain more competitive, and the way we're doing that is we're giving them lower taxes. Now this is a business that will pay higher taxes under Labor. They'll pay lower taxes under the Coalition and the LNP, and they'll pay higher taxes under Labor. Now I'm not making that up. The Labor party have made that quite clear that they will be reversing the tax cuts for businesses like Coxon's. And they're not a multinational. This isn't a big bank. It's not Google. It's not Microsoft. This is Coxon's Radiators here in Rockhampton. They've got a turnover of just less than $50 million a year or thereabouts and their business depends actually though on a lot of those big companies. Customers are companies like Glencore, companies like BHP. Now when all businesses are more competitive, Coxon's is going to do better. And that's good for Rockhampton. It's good for the people who work here. It's good for the people they train. It's good for the local economy. It's good for the national economy. Ensuring that businesses like Coxon's don't have to pay more money to me as the Treasurer so they can spend more money, a family business, their two sons are running their other two shops, and they've been running this one, the less they have to pay to the Government, means the more they can invest on growing that business, providing great services, training people, better wages. It's all upside. So why you'd want to put a bigger tax on this business is something that Chris Bowen should be explaining today at the National Press Club. Why does he want to increase the tax on businesses like Coxon's? He can't go around telling people that they're big multinationals and banks. They're not. It's a family business with 35 employees, and they'll be paying less tax as a result of the tax cuts we have already legislated from 1 July next year. Now I have no doubt that Coxon's will grow even more and they'll go above that threshold. That's why we want to see the rest of the plan put in place. So, this is an important part of why we've been able to create a stronger economy, by having the sort of business tax arrangements which means they can be competitive.

We've got a personal plan which means over 57,000 people here in Michelle's electorate on the Capricorn coast will be paying lower taxes. Lower taxes straight away as a result of the personal tax plan we've put out. Now we're also investing as she said in important infrastructure throughout North Queensland, but also particularly here. People already know what we've done with Rookwood Weir and we're pleased that finally the State Government has caught up and is matching that support and they're getting on with that project, and that's getting under way now. That's an important project. $10 billion is there for the boosting of the Bruce, and there's a range of projects and yes, you have been in my ear on those and many others as Michelle always is…

LANDRY:

I have.

TREASURER:

And we'll make further announcements about the Bruce Highway over the course of this year and before the next election. But what is really important, is you've gotta invest in a stronger economy in Rockhampton. You've gotta invest in a stronger economy in North Queensland, in Queensland, all around the country because it's the stronger economy which delivers the essential services like hospitals, schools, and Medicare and the pharmaceutical benefits scheme and the pension, and all of these things. Only a stronger economy delivers that, and if you put bigger taxes on businesses like Coxon's, you won't have a stronger economy. You'll have a weaker one. And that puts everything else at risk.

QUESTION:

Treasurer, do you know where central Queensland is on the map?

TREASURER:

We're standing here.

QUESTION:

Well why didn't we get a single cent for any new projects in the central [inaudible] in the Budget?

TREASURER:

I've just told you there's $10 billion in additional funding to new projects on the Bruce Highway. And we'll be making more announcements about that, and the timing about those announcements is a matter for the Government. But we've just told you about the Rookwood Weir…

QUESTION:

Why isn't it…

TREASURER:

$175 million. And we had to wait, how long was it? 18 months?

LANDRY:

Yeah nearly two years.

TREASURER:

Nearly two years for the State Government to come and actually match that commitment and get this project going…

QUESTION:

The Rookwood Weir…

TREASURER:

We've put a, we've put…

QUESTION:

wasn't even mentioned by name in the Budget…

TREASURER:

That's because we'd already funded it. The money's already there. We've already put it down. $175 million. We had to wait for the Queensland State Government to have an election because they didn't want to upset the almond latte set in central Brisbane because they were going to spend money on the Weir up here in Central Queensland. We're getting the same thing now with the land management practices as well. It's getting even worse because what they're doing here in Queensland with the land management practices is about how farmers can actually manage their own land. I heard a farmer say, 'it's like getting to buy a property and not use the house'. That's what they're doing and now the Federal Labor Party wants to do what they're doing here in Queensland to the whole country. Now that's not going to make a stronger economy. 57,000 people living right here in this electorate will be getting tax relief from 1 July of next year.

QUESTION:

Back to the Budget though why wasn't…

TREASURER:

That was in the Budget.

QUESTION:

In the Federal Budget, in like the start of it, you mentioned that mining and resources is the most important part, one of the most important parts of the economy yet there was no funding promise for any initiatives to drive that apart from what's already been promised in NAIF. Are you planning on bringing some more funding forward to drive one of the most important sectors in the country?

TREASURER:

Well what I said at the start of the Budget was the come down off the mining investment boom was the biggest shock to the Australian economy that we've seen in a generation. And that is true. Despite $80 billion being ripped out of the Australian economy because of the fall in the terms of trade and commodity prices, and what's happening with mining investment in this country, has put our economy under a real strain. And that's why I find Coxon's performance here so incredible. They've been able to grow through that process and expand, and diversify. Now whether it's the NAIF, or whether it's our investments in infrastructure, whether it's lower taxes for all of these businesses. Remember we want lower taxes for all businesses that supports all of them. Coxon's here get their bills paid because of the clients they've got in the big mining sectors. Now we think the tax relief should go right across the whole economy. The Labor party thinks all of them should pay higher taxes. We think they should pay lower taxes. That's only going to support investment. Having a ten year plan that we outlined in 2016 for lower taxes for the whole economy means that those mining companies when they're looking at Australia, and BHP have said this, Rio have said this, they've said our tax plan is a key reason why they would invest in Australia. And if that were to be reversed by Labor, that would be a key reason why they wouldn't invest in Australia. So our tax plan, our infrastructure plan, what we're investing in infrastructure is all backing in the investment of large companies and small companies alike.

QUESTION:

Andrew Forest has criticised [inaudible]…

TREASURER:

Sorry I missed the start of that.

QUESTION:

Andrew Forrest has been quoted criticising Australia's media coverage of China. He says that it breaks his heart when it's republished in China. Is the media, should they tone down their coverage?

TREASURER:

Well I don't run the media. You run the media. So I'll leave what you say up to you.

QUESTION:

And regarding the athletes who have gone AWOL since the Commonwealth Games. What happens to the ones who apply for those bridging visas?

TREASURER:

I'll have to refer you to the Home Affairs Minister. He's looking after those things very capably. I used to look after Immigration, and when we stopped the boats, and I'm pleased that Peter's kept them stopped, and I noticed yesterday that Bill Shorten said, 'we'll turn back the boats'. I remember Kevin Rudd saying he'll turn back the boats. Yeah right Bill. Yeah right. We all think you'll turn back the boats. I'm sure you will. You and Tanya. You'll all be sitting around there. I'm sure you'll do it. Seriously, he tests people's credibility on most things but on that one, I had to shake my head.

QUESTION:

Do you know what will happen to those who'll miss the deadline to apply for those bridging visas?

TREASURER:

Well I was saying I'll refer you to the Home Affairs Minister.

QUESTION:

Treasurer. Many people have told me they think you are leaving the local member out to dry in one of the most marginal seats in the country with this Budget. Why?

TREASURER:

Well I disagree. And so does Michelle…

LANDRY:

Yeah I do I do.

TREASURER:

And she can tell you why.

LANDRY:

I do. And look since the 2016 election, we've had over $400 million in projects here and a lot of that has been in road projects. In the next couple of months, there's $60 million going to the Capricorn Highway between Rockhampton and Gracemere. Up at Walkerston in the northern part of the electorate 75…

QUESTION:

The Walkerston funding was reannounced. It was in the last Budget.

LANDRY:

Yeah it's coming out in this Budget so there was a small section of it last time and then it's actually work up there. So some of this was in the forwards of the Budget. There's $56 million around the Ring Road. That's money that was in the forward…

QUESTION:

Again Michelle that was in the last Budget.

LANDRY:

Yeah but these projects take many years to come about. I mean when we look at Labor in the past, nothing was spent in this area. My first term, we spent $550 million here. We got Yeppoon up and going. We've put significant money into roads. We've spent nearly, spending nearly $400 million this time. We've just made announcements about funding the juice plant down on the coast for Tropical Pines. That was $7 million. The crocodile farm, $600,000. $1.5 million for Mount Archer. $5 million for Signature Beef. Not everything was announced on Budget night. These are things that are rolling out in this Budget. And it is significant funds for this area. And that will continue. As the Treasurer has said, there's $10 billion for the Bruce Highway and I've been talking to him about where we can put the passing lanes on the road between Rockhampton and Mackay. So there's significant funds. It's not all announced on Budget night. A lot of this is rolling out of this Budget and the next Budget. And within the next 12 months we've got an election coming up so I'll be putting the heavies on them and once again then to fund some of the projects.

QUESTION:

While you're both here, we've seen like I think two or three fatal crashes on the Fitzroy Developmental Road in the past three months. I mean that's a pretty rural road that a lot of trucks use and a lot of drivers use. Can you say that you're lobbying for that funding? And Treasurer will you promise some funding for one of the most dangerous roads in this region?

LANDRY:

That road is actually a road that is controlled by the State Government. What happens there is that the local and the State Governments put in applications for funding big projects like that. We put $165 million into the Peak Downs Highway on the Eton Range and that was a project that the State couldn't afford to do. So, they need to talk to us about that. They need to talk to Michael McCormack and his team about that and that certainly could be something that we could be looking at. There's funding that the Treasurer's announced with strategic roads. Last time that was about Beef Roads but this time it's about important roads like the Beef Development Roads…

TREASURER:

Yeah it was about $3.5 billion.

LANDRY:

Or money out at Clermont and all those sort of things. So look we are certainly on the case of that. I travel those roads all the time. Douglas and I have only just come back last week or the week before from out there. So I certainly know the issues of those roads and that's something that we'll continue to fight for.

QUESTION:

You've claimed that someone's entire income comes from dividend imputation credits on Sky News. How can you claim that?

TREASURER:

They did.

QUESTION:

No but how can you claim that on their behalf?

TREASURER:

Because she told me that's what her entire income was based on. So that was directly from that taxpayer. She told me that herself when I visited her retirement village in Brisbane. So I had no reason to doubt her. She actually shared that experience with me just like you've just shared the experience of what happens on some of the local roads here. I don't think you're misrepresenting that and I don't think she was misrepresenting that to me either so I don't know why anyone would doubt her.

QUESTION:

Can I just ask one question? There's $50 million promised for the Better Regions Funding. Will we see the flood levy for any money for that? And we now know that Landry is supporting it. Can we see any money coming out of the Budget for the flood levy?

TREASURER:

On the Building Better Regions Fund, there's a further round that's going into that, and we welcome. That provides opportunities all around the country. But Michelle can talk about the levy.

LANDRY:

So the Council has put an application in for that and I've given them a letter of support. Obviously there is a lot of people that apply for funding for these projects so you know I've done all I can at this stage to promote that project. There is, as the Treasurer said, another round that has been announced that will be opening shortly I believe…

TREASURER:

Yep that's right.

LANDRY:

And if they're unsuccessful this time we'll be certainly pushing for it then.

TREASURER:

Yeah look there's a proper process for how these things are decided. You know people make applications and the Members rightly support them, and they're properly assessed and the benefits are weighed up and I mean money, you don't just go round throwing money around like confetti. That's not how it works. That's not how we run the country. What we do, is we keep a very tight control on spending, and a very tight control on how much tax is being put on the Australian economy. That means the economy can thrive and we can afford these sorts of things. I mean if there was not a further round of the Building Better Regions Fund, there wouldn't be an opportunity for this. In the Budget I've provided for an opportunity for this and I'm sure that project will go through all the proper analysis and a decision will be made in good time. Just like the decisions that will be made in good time on the Bruce Highway and the urgent needs that there are for the coast here and Central Queensland. Just like there is for North Queensland. Just like there is for other parts of Queensland.

QUESTION:

Would you support the takeover of gas provider Santos by Harbour Energy?

TREASURER:

Well these are matters that are currently going through the FIRB process and they're very sensitive matters and it's not my practice to give any public commentary on those matters. It would not be assisting with what is a proper process.

QUESTION:

Economist Saul Eslake has joined the list of those claiming the Government is fudging the figures by bearing infrastructure spending off Budget to make the balance sheet read better. What would you say to that?

TREASURER:

There are no new projects being funded off balance sheet in this Budget. None. The same ones that were in last year's Budget are in this year's Budget. So there are just no additional projects that are being treated in that way. So I don't know what he's basing that comment on. But the things that we're doing in that way, the NBN, that was one that was started by the Labor party. And the Melbourne to Brisbane rail, the Inland Rail link was another one that was being treated that way. Snowy Hydro has always been off balance sheet. It's a separate company. Where there are investments that are made by these entities, the Western Sydney Airport Corporation, that's another one. That was in last year's Budget. So none of these things are new. And what it means is this, is where a project can actually stand on its own feet and fund itself, so where it can borrow money and finance and support those borrowings as a business, well it can, and it doesn't then lean on taxpayers. It actually enables it to be supported through its own commercial existence. That's a good way. That's a good thing. That actually helps taxpayers. That's a smart way to actually run your finances. So no I don't know what he's basing that on given there are actually no additional infrastructure projects that are actually being dealt with in this way in this Budget.

QUESTION:

Labor's also accusing the Government of swindling the elderly by taking $1.6 billion from nursing homes and rebadging it as new money for home care packages. What would you have to say to that?

TREASURER:

Well I think that's a pretty cynical thing for the Labor party to say. We're putting in an additional 20,000 home care places, in-home care places, that are there to help Australians to make the choice to stay in their own home. I mean why doesn't Labor just support it? Honestly? This is helping people make a choice to stay in their home. For once, could we not have a fight about something like that? Couldn't the Labor party just say, 'Look that's great, we support that, we think it's good for people'. Let's not have a political fight about everything.

QUESTION:

And a new survey from Deloitte has found younger Australians think big business and politicians do more harm than good. How do you change that perception?

TREASURER:

Well, what I think is really important is that for all Australians the economy we live in in the next ten years will determine so many people's choices. It will determine your choices. Everyone's choices here. You know what job you get, what sort of economy you live in, what you can earn, saving for a house, looking after parents. All of this. It's massively impacted by the economy you live in. I remember when I left university I went into an economy where interest rates went to 17-18 per cent. Almost one in four working age people were on welfare, and we had unemployment of more than a million people. That's the job market I went into back in the 90s. I don't want that for anyone here, and I don't want that for anyone around this country. The way you ensure that you deliver for Australians is by having a stronger economy. Now Governments have a role to play in that and all the things that Michelle and I have talked about. Businesses like the one we're at today are playing an important role in that. Even larger businesses like the ones that you're referring to are actually delivering when it comes to the tax revenue and the jobs that are created in our economy. You take your economy for granted at your great peril. When you do that, you say, 'we don't need large businesses and we can have higher taxes and we can spend lots more money'. You know what happens at the end of that story? It's not pretty. I've lived that before when Governments did that, so has Michelle, I'm sure so has Julie. We all remember what that was like, and we do not want to visit that on another generation.

QUESTION:

Is the future of our economy small business or big business?

TREASURER:

It's all business. It's all business. Because all businesses create profits, employ people, pay for the services that are provided by Coxon's here, and create those jobs. Jobs don't fall out of the sky. They don't come from the Government. They come from businesses like Coxon's. I don't think they should be paying higher taxes. Bill Shorten does and I think he's wrong. Thanks a lot. Cheers.

It is great to have the Federal Treasurer here in Townsville a few days after the Budget to spread the good news of our last Budget which is just fantastic. I am so excited to have Scott Morrison here. You know, he's the only Treasurer since Peter Costello all those years ago who has been able to head us towards a surplus in the Federal Budget. Under Scott Morrison, Australia is now paying its own way like any small business, like any family budget, we are getting to the stage where we are earning more than we are spending. In a couple of years under Scott Morrison's leadership we will have the budget back into surplus. Scott is not a stranger to Townsville. It is great to be able to show him around this town today, particularly the stadium and a few other things that are really happening here thanks to the federal government and it is a delight Scott to welcome you here to see what is happening and to continue to spread the good news about the Budget. I might now hand over to George Christensen who is the Member for Dawson which, as you know, is just across the street more or less, the electorate of Dawson, and George will add to my welcome to the Treasurer.

GEORGE CHRISTENSEN, MEMBER FOR DAWSON:

Thanks very much Ian and it is a great pleasure to be here with Scott Morrison our national Treasurer who delivered what I think is a terrific budget for North Queensland. In fact in the electorate of Dawson from Mackay all the way up to Townsville there is pretty much close to half a billion worth of infrastructure works and if I just step over the border to this place we are investing a hell of a lot of money, $100 million in total in fact, towards construction of the Townsville Stadium and I'm pleased to see a lot of that go to local businesses, particularly local employment. I know the Treasurer spoke to people in the stadium there and was very impressed with the level of localism that has been involved in this project. I will let him speak a few words but it will be great when this place is fully constructed and we can invite you back Scott to see the Cowboys beat the Sharkies.

TREASURER:

Good on you George and Macca, Ian, it is great to be here with you. It's great to be back here in Townsville. Last time there was a crew up here from the Shire it didn't end too well for us at 'Smiles' Stadium in the first round of the NRL. They are always great contests between the Sharks and the Cowboys. I always enjoy them thoroughly. I was talking about Taumololo last night actually during the Sky broadcast and how wrestling debt to the ground which we have been doing over the last five years is a bit like wrestling good old Taumalolo to the ground. You have to get hold of him and drag him down. That's what we have been doing. With this Budget, we're now starting to pay down that debt, reducing debt by $30 billion over the next four years. $230 billion and more over the next ten years. Particularly why I'm here today with Ian and George is that at the last election we said we were going to commit $100 million to get this built and here it is. It's happening. A promise in action. Delivering on the ground. It's tremendous to see the works underway, all on time, all on budget. Some 230-odd North Queensland businesses benefitting from the construction. 85 per cent of the trade packages provided here, all going to local North Queensland businesses, which is tremendous. You have just under 240 people thereabouts inducted on the site, and the overwhelming majority of those are local people, which is tremendous to see, and a very high rate of Indigenous employment on the site as well, tracking above the target, well over 20 per cent at the moment. That's tremendous to see. Over $40 million has already spent on the site. So it's really starting to move. And that's fantastic. Of course, that $100 million that the Commonwealth has invested, partnering with the State Government here to make this happen, is part of a much bigger package for Townsville. It's part of a $250 million package for Townsville. I want to assure everyone in Townsville that full $250 million will be committed to projects in Townsville. As we know, the eastern access rail corridor has had a feasibility economic analysis done on it, and the State Government has received that and people are aware of the issues there. We're in the process of now just receiving our own analysis of that. We're only going to invest money in projects that are going to make a real impact on the ground, creating jobs, supporting investment, building a stronger economy here in North Queensland, here in Townsville, and across the nation. Later today, I'll be meeting with the port authority here and talking through some of their key issues around what they would like to see invested in here. It's true that the port authority does very well for the State Government. It turns about $15 million profit a year, and that's great. It's good to see it's a successful port, we are keen to see as much that reinvested back into the port facilities here, rather than propping up state budgets. It should go into providing infrastructure for Townsville, and I'm looking forward to having a good conversation about that, as well as the other infrastructure priorities here around Townsville.

The other thing, you know, the Northern Australia Infrastructure Facility, that both Ian, chairing that committee many years ago, and George has had a strong interest in, we liberated that NAIF fund, we made it far more flexible. It can make smaller loans, get more involved in projects that it could before, and I notice the editorial in the paper today, outlining all of that. I think they're good changes. It has been too restricted. It has been far too tied up in too many rules, that has prevented, I think, some real money flowing. So the Prime Minister and I, Matthew Canavan, the minister responsible, are very keen to see a lot more of that lower cost finance making its way to these important projects right across Northern Australia. There's $1.5 billion for road funding, and North Queensland projects will feature in that.

So this is about creating a stronger economy for Townsville. It's about creating a stronger economy for North Queensland, and it's about creating a stronger economy for Australia. Because only with a plan for a stronger economy that we outlined in the Budget I handed down last week, can we deliver on the essential services that Queenslanders rely on. Hospitals, schools, Medicare, all of these things depend on a strong economy in Australia. The record job growth we had last year, 415,000, one in five of those jobs went to Queenslanders. One in five. So Queensland is really sharing in the growing economy that we are building as a Commonwealth government, and the project you see behind me, the projects we're still committed to, and we'll work through here in Townsville, we will ensure that all of that $250 million, that quarter of a billion dollars that we committed to Townsville will be spent right here in Townsville, doing exactly what's happening behind us there, employing people, making a stronger economy.

QUESTION:

Treasurer, can you outline some of the North Queensland specific promises made in the most recent budget?

TREASURER:

We've got a quarter of a billion dollars here for Townsville. One of those projects is for the eastern access rail corridor and the other is happening right behind us. We have partnered with the State Government on both of those projects. The eastern rail corridor has some issues with the viability. When it was first floated, Queensland Nickel was doing something very different to what it's doing now. That gives us an opportunity to look at that project. If it's not one that passes muster, then that $150 million will be spent on alternative projects here in Townsville.

QUESTION:

Treasurer, can you understand why the people of Townsville feel like they have missed out in this year's Budget because you are spruiking announcements from previous years, previous budgets. What did Townsville get, infrastructure or any other specific…

TREASURER:

Townsville is getting a quarter of a billion dollars' worth of investment right here from the Commonwealth Government. And there's another $150 million out of that quarter of a billion that is still to be invested. So $100 million going on behind us and there is $150 million more coming.

QUESTION:

You mentioned the Productivity Commission. You are releasing its report into GST redistribution, will you adopt its recommendations?

TREASURER:

The PC report will be received today by the government. We'll be releasing that next month, in a few weeks' time, once the government, the Cabinet, has had an opportunity to be briefed and I also promised the state and territory treasurers that prior to its release, they would also have the opportunity to be briefed. I don't anticipate that will take too long. I anticipate being able to do that next month, which is not that far away, and the normal process for any Productivity Commission report, it's 25 sitting days, that could mean it could go to September. We're not doing that. We'll get the report out. I should stress it will be a report to government, not from the government. It's another important next step in this process as we work through trying to make the GST more reliable in terms of the distributions made to the states, more predictable, so states and territories can budget with a lot more certainty, whether it's here in Queensland, Western Australia, Tasmania or elsewhere. The other thing we said to the Productivity Commission is you need a clear transition plan if you're going to make any changes, which means that all states are in a position to ensure that what they're getting currently, the amount of money they're getting currently, is not eroded as well. They're the things we still have to work through. There will still be a very exhaustive process that follows the Productivity Commission's report release and we'll consider its recommendations but we'll be doing other work in parallel and working with the other states and territories to come up with a package of possible reforms ones we have been able to finalise that. So it's the next step in the process. The report will be made public, as it should be, and that will be done once we have the opportunity obviously for the government to work through it, and look at it, and be briefed on it, at a cabinet level, but also for the state and territory treasurers to get that opportunity as well, which I promised them when I last met with them a little while ago.

QUESTION:

Treasurer, what's the difference between funding TEARC without a business case and now having to potentially revise that and refusing to fund water security or the port channel widening project for the reason you don't have a business case yet?

TREASURER:

There are business cases coming forward on all of these projects. We think you should be making investments where they make the biggest impact. If the TEARC project doesn't stack up, we'll invest that $150 million elsewhere in Townsville. That's what I am saying very clearly. That money will stay in Townsville. If TEARC is not the best project to invest it in, then the money will go to other important projects which create jobs here in Townsville. I'm meeting with the port authority later today and we will have a good chat with them about what their proposals are. On the water issues, there's a report coming forward from a taskforce, and Ian, that's in September of this year, and so there will be an opportunity to consider that when that comes forward. But our commitment here to Townsville has not budged an inch. You're seeing the promise we made at the last election delivered right behind me. I stood here in Townsville, not long before the election as did the former Member for Herbert Ewen Jones, and said we were going to build this, and it's being built. We're keeping our promises to Townsville and we'll keep that promise of a quarter of billion dollars being spent on important infrastructure projects here in Townsville.

QUESTION:

No NAIF money has been spent in Queensland so far. Would the government admit to this date, it's been a failure?

TREASURER:

I'm been very disappointed, frankly, with the NAIF so far. That's why we changed the rules. That's why we freed it up. I think the analysis that has been made of that has equally frustrated the Prime Minister and myself and I know Minister Canavan and prior to that, Josh Frydenberg, who was minister. So we've tidied it up, made it more flexible, gave it more room to do the work it needs to do. And I know as was reported here today, the head of that fund is looking forward to getting out there and getting some projects happening. No-one is more keen or enthusiastic in seeing the NAIF hit the road running. It's been disappointing [inaudible] to date but that's why we have taken the action we have.

QUESTION:

To your knowledge, has there have been any interest since those rule changes have been announced, from big projects?

TREASURER:

Yes there has. Ian, did you want to comment on that?

SENATOR MACDONALD:

Of course, the NAIF board is bound by secrecy. We can't say too much but I'm assured by the NAIF board and by the Minister we're a few weeks off some announcements for some very major projects. While I have the mic, can I also, Treasurer, you would be aware of this, we just spent $75 million on CRC, which is based here in Townsville. We just announced over half a billion for the Great Barrier Reef, to be spent in North Queensland, and the local member and the member for Kennedy said there's nothing in it for Herbert or Kennedy. Well I can show him 70,000 people, many of whom will include you here today, who will get more money in their pay packets because of Scott Morrison's work in returning money to the workers in tax cuts. So 70,000 people in Herbert have got a lot out of this Budget.

QUESTION:

There's a report today saying some power companies have been overcharging customers to have a tax bill. If that's true, should they be charged and refunded?

TREASURER:

We're taking action on that through the AER. Minister Frydenberg has issued those instructions. As some people may know, polls and wires companies have a pretty good deal. They get a guaranteed rate of return under the way the rules work. And what they're looking at is whether they've been overcharging by over claiming what they've been paying in tax on that model. That's not on. So the AER is getting into that. Whatever action needs to be taken as a result of that inquiry will be taken. They can't be taking customers for a ride on these things. I would hope that is not the case. But we wouldn't be initiating this investigation, this inquiry, if we weren't concerned.

QUESTION:

Treasurer, any reason why you're not touring the site today, like Bill Shorten did?

TREASURER:

I did tour the site. I have just taken a tour of the site. It was good to get a tour of the site.

QUESTION:

[inaudible]

TREASURER:

I look really bad in those hats and glasses. I don't know if Bill looks any better in them quite frankly. I thought, you know, the three pretty faces you have here would look much better without out the sunnies and the hats and the luminous vests. I thought I would give you a break from the luminous vests.

QUESTION:

Any problem for the State Government with you being on site?

TREASURER:

There are arrangements for these sorts of things. I'm not looking to pick a fight over that, I'm just interested in it being built. I'm sure the people of Townsville couldn't care less which politicians walk on site and don't. We have just been on site, we had a good briefing, had a chat to a few workers and I'm just really pleased to see it happening. I think it's great that it's happening. We're spending a quarter of a billion dollars here in Townsville. How good's that?

QUESTION:

[inaudible]

TREASURER:

How's it possible? She's a self-funded retiree. She doesn't get a pension. What she has, she has investments in shares that receive franked dividends, and because she is under the threshold for paying tax, it means she gets a rebate for the value of those franked dividends. That is what she lives off. This is what happens in Australia. Bill Shorten doesn't seem to understand this. Self-funded retirees, small businesses, buy shares in Australian companies, and where they don't have a taxable income, they actually get that as a refund. It's their money. It's their money. And he is counting on more than $5 billion a year by ripping off retirees, pensioners, nannas, nonnas and yayas all over the country. It's a theft. It's a cruel theft.

QUESTION:

So how much did she say she was losing each year?

TREASURER:

She is losing over tens of thousands of dollars, she told us yesterday.

QUESTION:

How soon do you expect to release the GST report?

TREASURER:

I just answered that question earlier.

QUESTION:

Tony Abbott has tweeted support for Australia moving its embassy to Jerusalem, as a Cabinet Minister would you support that position?

TREASURER:

Well I will leave those matters to the Foreign Minister. Ok, great. Thank you very much.

QUESTION:

[inaudible]

CHRISTENSEN:

I would just say in regards to funding that is coming to Townsville, there is no way people can say that North Queensland is receiving nothing. We have got $1.5 billion of dedicated strategic road funding for North Queensland. There is $1.4 billion in our additional funding for the Bruce Highway that is sitting there un-earmarked that could actually fund local Bruce Highway projects. We are investing over $400 million just down the road on the Haughton River Bridge to upgrade that and that is going to be built with local businesses and local workers. There is this project here and Ian and myself have been a flea in the Treasurer's ear about the two key issues we know are in Townsville, water and the port. The Treasurer has just said again and again we have $150 million that may be spared to look at these other projects. So that is certainly a lot for Townsville and it is a lot to boost local employment.

G'day, good evening and welcome to Brisbane. What a special edition of Paul Murray Live we have this evening. We are at the North Lakes Sports Bar. Now as you know, we are here to hear what the Treasurer has to tell, not the fellow politicians, not the pundits, not the media, not the papers, not the pollsters – but the people about what are the benefits of his plan for how the joint is going to work for the next couple of years. We are here specifically in this part of Brisbane because this is the Federal electorate of Petrie. Now, to give you some history about this area: since 1987 this electorate has voted with the party that has become the Government every time. It was there for Hawke, it was there for Keating, it was there for Howard, it was there for Rudd, it was there for, well Gillard didn't really win, did she? But anyway, and then of course in 2013 it was here for Tony Abbott and then again for Malcolm Turnbull to be returned with the Liberals in 2016. As you know the Government has a one seat majority and for them to be returned as the Government they have to win here before they start reaching beyond to be able to hold on to power anywhere else. To give you an idea of this specific area and why we are here, the average median wage in this area is $50,000, it's a pretty much split of male/female. There are about three and a half thousand businesses that are located here but the unemployment rate is slightly higher than the national average. So, we expect there is plenty of things inside this room; from personal taxes, like much of the political debate has been, to all sorts of matters to do with pensions, businesses, all the rest. But, enough from me, let's introduce the man who will take the questions from the people in this room for the next hour or so. Please give it up for the Treasurer, Scott Morrison.

TREASURER:

G'day. How are you going? Are you well?

PAUL MURRAY:

Hello great man. How are you?

TREASURER:

Up up Cronulla!

PAUL MURRAY:

[laughs] Up up Cronulla? How are the Sharkies going?

TREASURER:

We had a great win on Sunday night over Canberra. I'm battling Canberra all the time, but the Sharks were battling them on Sunday night, and they got a great win. Well played.

PAUL MURRAY:

Well a bit of love for the Tigers there too, which was alright-ish. Always love when he sends me texts about the footy. So look, these people, I have no idea what they are about to ask you. Hopefully it will be fun, be interesting, hopefully the swearing will be just by the Treasurer. You know, so blue – he works very blue. But there is a couple of questions I wanted to ask just to get into this. Some of the big issues that people watching the Budget have had, including, you got more money this year than you expected to get because more people have jobs, businesses were paying more taxes because they were doing better. You made a choice not to close out the deficit faster, and if you can close out that deficit, start to pay off the debt. Why did you choose not to use the extra money? You didn't see balancing the books and paying off the beginnings of half a trillion in debt?

TREASURER:

Well the first answer to that question is that the additional revenue that has come into the Budget particularly this year and next year in additional taxes, all of that is going to the bottom line. All of that revenue in the first couple of years is going to the bottom line. What we've done over the back part of the Budget is when the taxes were growing too sharply we've said, 'too much tax is too much tax'. And you can't tax your way to paying down debt. You pay down debt. And so what we've decided to do is in those early parts of the Budget years, when that extra revenue is coming in, largely from commodity prices in the early part, but over the back part, and over the longer part of the Budget and over the medium term, where exactly as you say, the reason why the Budget is strong is for one particular reason, and that is we're getting people off welfare and into work. When you get people going from receiving a welfare check to paying taxes, that's how you get a stronger Budget. And that's what we're doing. You know, it's the twelve point turn-around. You stop the other side scoring, and you score down the other end. That's what we are doing with the Budget.

MURRAY:

Now I know that there's the ratio to GDP, there's all the other indices here, but that number of half a trillion dollars in debt is pretty easily understood by everyone, just as the advocacy for the Government of 1100 jobs a day. These are the things that are in play at the next election and Shorten getting there. What number is that half a trillion in a few years' time? Tell us, how does that start to work?

TREASURER:

Well you'll remember, people will remember that when Peter Costello and John Howard paid down the debt they paid off $96 billion of debt. Do you remember that? $96 billion dollars. That was net debt and they paid it all off. And what we're doing as a Government, and Luke Howarth is here today, the member for Petrie, and he and I, and the rest of the whole team, what we are doing, is we're paying down that net debt from now. In the last five years, wrestling debt has been trying to take down Taumalolo. You've got to get on him, and you've got to hold him and take him all the way to the ground. And that's the size of the monster of debt that we inherited from the previous Government. It was our job then to go and deal with it. From this year, we've hit that point – the turning point, where we start part paying down debt. We are no longer borrowing extra money to pay for pensions or welfare payments, or anything like that. And so net debt will fall by $30 billion over the next four years and by $230 billion and a bit more over the next ten years. Now you do that by getting people off welfare and into work. They are the numbers in the Budget, they are the numbers that are being credibly received by, you know, all sources when it comes to economics, and that's what we are doing. We are now in a position where we start paying down the debt. That's what happens when you get the Budget back into balance, and it's not easy to do it. But we've been able to get back to that position, where we no longer borrow to pay for every day expenses and now the debt is being paid down.

MURRAY:

The room's not about my questions, it's about theirs. So we'll get to that in a second. But I have to ask a selfish question as a smoker, right. On the behalf of the ever shrinking, but still, every increasingly taxed part of the population, I know that it's gone from $11 billion last year, $12 billion this year, $17 billion next year, and a lot of that's illegal tobacco, that's the hope that's going to happen, but at what point are we maxed out on how many times you can up the tax on smoking?

TREASURER:

Well the current program we've got, which is to 2020, we've got a schedule now that goes to 2020, and, yep, cigs up in this Budget again. But the good news is, beer was down, five bucks here at the bar, well done to the Sports Club, but that's where it is this year. And look, it's part of the plan that ensures that too much tax is too much tax. And we've got a speed limit on taxes in this Government and in this Budget. We've formally put a rule in that says taxes can be no greater than the speed limit, which is technically set at 23.9 per cent of the economy. The reason for that is, if you control how much you're prepared to tax, then that limits what you're prepared to spend. And a Government that's prepared to control how much it taxes is also a Government that is prepared to control how much it spends and that's how you pay off debt.

MURRAY:

Ok. Alright, thank you Treasurer. Ah let's have a chat with some people. Samuel is going to be the first one who is going to ask you a question. Mate I'll get you to stand up, and feel free to ask the Treasurer whatever the heck you want, mate.

QUESTION:

Evening, Paul. Evening, Scott. Look, I'm one of the 40 per cent of Australians who pays any net tax at all. I'm forced to forego a sizeable chunk of my income so that I can subsidise at the one end people who want to buy lots of houses but can't really afford to and at the other end, people who want to have lots of kids, but can't afford to. I'm subsidising these groups. So throw into this mix, those who seem to see Centerlink benefits not as a temporary measure but as a lifestyle choice that they make. Well, when is this going to change? When is the Government going to get its hand out of my pockets, right, and leave me to look after myself and broaden the tax burden so that it's more equitable? I'm sick to death of paying for other people's pet projects.

TREASURER:

That's a very good question. Less than a quarter of Australians who pay tax, so just under 25 per cent, pay about two thirds of the personal income tax in this country. So that's people earning more than 87 thousand dollars a year. They are less than 25 per cent of tax payers and they pay 65 per cent of the tax bill. Now, we're a country where we have a social safety net, and I think people that earn more are prepared to do their thing, and when they've had success in life, as a community, we're always prepared to share that. But, there are limits. They're not mugs either. And it's one thing for people for people to say that they should pay more and more and more tax and the people who say they should more and more tax just largely want to spend their money. And it's often people on public service salaries and things like this, or academics who have lots of ideas of how to spend your tax money. But our view is this: you know how spend your money better than the Government. And we want you to keep as much of that as possible. So the tax plan I introduced in the Budget does this: first of all, it provides real tax relief to middle and low income earning Australians of up to 530 bucks as a tax refund, in one hit you get it through your tax refund. But stage two is really important, and that actually starts straight away. We deal with bracket creep. First of all, we move the 87,000 threshold to 90,000 that happens July 1 of this year. The second step, is to move that 90,000 threshold to 120,000 in 2022/23. And then 2024/25 we abolish the 37 cent tax threshold completely. So we have lower, fairer, and simpler taxes. It means that by the end of our plan, 94 per cent of Australians will pay a marginal tax rate of no greater than 32.5 cents in the dollar. That means that for most Australians, who will earn over their lifetime somewhere between 40,000 and up to 200,000 they will never face bracket creep again, over their entire working life. That means that every extra dollar they earn, every extra hour they get every extra shift they do, every extra bit of overtime they do as a policeman or a nurse or a policewoman, they don't have to pay the Government more for it, than they otherwise would. And that's why we have announced a full plan. Our tax plan is a full plan and people are saying to me "oh why don't you break it up". Well you can't bake a cake if you only do the first half of the recipe. It won't give you a full cake. You need the full recipe to have lower, simpler, and fairer taxes in this country, and that's what our personal plan is about.

MURRAY:

Can I just ask, as well as extension to what Samuel has just said, philosophies… I know that your philosophy has always been about pulling back spending, getting rid of debt, all of these things. But as Samuel just mentioned, if you're one these people who's just in the middle, now there's a million terms for these people who used to be Howards Battlers, and it's forgotten people, and now I think it's hard working Australians at the moment, whatever that group is, which, I think, is largely this room. Normal people, yeah. Bob, Jenny, you know, Mohammad. The point about, why should I pay for somebody to have heaps of houses and somebody to have heaps of kids. At what point, or what role do you see philosophically, Government in sending a message saying "we'll help you, but were not going to hold your hand while you make stupid choices."

TREASURER:

Yeah look I think we already had been doing that on welfare. Welfare at the moment, we have now the lowest level of welfare dependency of the working age population at any time in the last 25 years. When I left school and I left university and the decade of the economy I walked into in the 1990s, almost one in four under that Labor Government, who were of working age, were on some form of welfare payment. That's fallen to just over 15 per cent under our Government. It's one of the lowest levels of welfare dependencies we've seen. Now that's what's happening. That's a good thing. Because it means people are getting off welfare and into work. We had 415,000 people last year according to the Australian bureau of Statistics who got a job last year. That's more than a thousand jobs every day. When you get more than a thousand people every day going from receiving welfare to paying tax, that's what makes the country strong again.

MURRAY:

Alright we've got another question. Whack up as many hands as you can, and I'll move around here. They're getting stage fright because you're here. Alright we'll move it up to the back here – I have to squeeze here, sorry Treasurer.

TREASURER:

Breath in, mate.

MURRAY:

Yeah breath in! Very deep breath. Alright, stand up and have a chat to the Treasurer. What's your name?

QUESTION:

My name is Leigh and I'm from Redland Bay. I would like to know why we can no longer make a cash transaction over $10,000 without it being assumed it's of a criminal intent. Is there a war on cash?

TREASURER:

No there's not a war on cash, but we do know that for very large transactions the need to pay for it in suitcases full of cash is not the way that is necessary anymore. I mean today with the way that the system works, with how you can do things with electronic payments and all of these things mean, that we do know that cash used in large quantities is predominantly used by those who are engaging in things they shouldn't be. And, of course, there's the organised criminals activity, bikie gangs and all that, they do that, they try to pay for weddings with bags full of cash, I know that for a fact. In addition there are those who will use it for terrorist purposes and pay in cash. But then there are others who will say "well I'm going to use cash because I don't want to declare the income and you pay me in cash, and guess what; I'll give you a discount." When that's happening, you're actually ripping off a mate. It's actually not clever. It's actually not OK. And I think taxes should be lower, simpler, and fairer, but I also think they should be paid by everybody. And to make the system fair for everyone, we can't allow it up for abuse where some people will take a discount for allowing someone to else avoid tax – that's not right. I don't think that's right – I don't think that's fair. If we want taxes to be lower in this country, we've all got to pay them, but we've got to do it in a fair way where we don't rip others off. Now I know there will be certain cases where people may be legitimately using transactions with cash of 10,000and more but I'd say, you know, how many people pay 10,000 bucks in cash for a transaction. It's pretty rare, and I've got to tell you, those we know who do it often, they're not doing it to help Australians.

MURRAY:

But when we see the $10,000 bags of cash, bikies, I understand all of that, but all of us also have been to the hot bread shop that says cash only. The smaller things, smaller transactions, lunch; what's the expectation about dobbing those people in or do you have people in the tax office that go and find those people? Because obviously there are people who don't do cash only businesses whose might be right next door to a cash only business and they're getting screwed.

TREASURER:

Well I think those businesses are going to find that customers increasingly are going to be annoyed. I went to buy a pie in Blackheath in Sydney not that long ago and it was a cash only business. I had to go back down to the shop and get some, you know down to the ATM to get the money, and come back. That wasn't the greatest customer experience when these days you can use so many different ways to pay. Really what will help us deal with the black economy, and we've got a big piece on the black economy which is basically making sure people aren't abusing the tax system and trying to work outside the tax system. Australians aren't above tax any more than they're above the law, and by the way the tax is the law. So I think it's the right thing to do to have the right integrity. We're putting a lot more resources into tracking down and putting a light on that black economy. But increasingly, I think, the way the economy is working with digital transactions and payments and the cards and all of that, will mean that largely it will be what customers expect and business who don't do that, well they won't get the business.

MURRAY:

Alright, well another question quickly before the break. I've got one over here. Alright, sir, I'll come to you. What's the logo on the shirt? I like it. Norfolk Island – well done, sir.

QUESTION:

Yeah mine's about superannuation. I've got family members that have worked casually for the AEC and QEC. By working with them on a casual basis, might be when an election is on, might be for one day, might be for two weeks or something like that, they get super, it goes straight into the nominated fund from the QEC or the AEC, not personal one. If it's only a small amount, right, before you can transfer it over to your own personal super fund, it gets eaten up by taxes straight away.

TREASURER:

Well is it getting eaten up by fees? Well we're abolishing exit fees for superannuation funds. Abolished – gone. So if you've got your money in, you know this also affects young people as well. If you've got a number of jobs that they're working, and they've got money going into all sorts of different accounts. To consolidate and to get it all together and get it out, it's being eaten up by these industry funds and lots of fees. Well that's not fair. So we're getting rid of those fees, we're banning those fees. We are also going to for young people ensure that they don't have to take out this mandatory life insurance if they're under 25 for a product they didn't ask for that they're quite happy to charge you for. I mean, what's with that? That's a bit of a racket. So that's going as well. We're also abolishing fees and limiting fees, I should say, for low balance fees. So if you've got just a few thousand bucks and things like that they shouldn't be charging you excessive fees on that – that's just a rip off. And the other thing we are going to do is the tax office, using that technology, is going to start automatically reuniting people's lost super and putting it into your active superannuation account. Because when it's sitting in all these little funds, again, out comes the fee muncher and starts eating up your savings.

MURRAY:

Alright, we'll leave it there and take a quick break. Enjoy your sausage rolls ladies and gentlemen. We have the finest of cuisine available here! And I'm not joking; I actually love food like this. More in a sec!

[break]

MURRAY:

That sounds you can hear is the North Lakes Sports Club. Hello! Hello! [laughs] Kind of cool isn't it. We are here with Treasurer, Scott Morrison, on a special addition of Paul Murray Live. If you want to be part of it at home you know what to do. Let's all say it together. The hashtag is PMLive, email pmurray@skynews.com.au or jump onto the Facebook page just go searching for Paul Murray Live. So, the Treasurer is here for about an hour to take some questions. The only time he's going to be doing it, so we thank everyone for turning up and him as well for being here.

TREASURER:

Pleasure

MURRAY:

Sir, what's your question? What's your name and what's your question?

QUESTION:

My name is Sam. Good evening, Treasurer.

TREASURER:

G'day

QUESTION:

I believe that the Government's Budget is better but how are you going to sell that with the opposition, we've got unions in this area and they've already started their campaign and they're campaigning pretty hard. How are you going to sell your Budget?

TREASURER:

At the heart of the Budget is a plan for a stronger economy over the next decade. And Australians are sensible people. And, you know, the economy it's not a theory, it's what you live in. The economy over the next ten years is going to condition so many Australians choices and we want that economy to be stronger. If you have a stronger economy, as Luke Howarth knows, then you can pay for essential services like Medicare, like hospitals. I mean we are increasing hospital funding by $30 billion with agreement we've got before the State governments over the next five years. You can't do that without a stronger economy. The money just doesn't fall from some tree. So the plan is about a stronger economy so business invest more and they employ more people. That we keep taxes competitive and lower and all the things I've talked about. Investing in infrastructure here, particularly boosting the Bruce which Luke's been a big advocate for. But look, it's the stronger economy that I think Australians know, really, will help them make the choices and live the life they want to live over the next ten years. I never hear the Labor Party really talk about that. They talk about a lot of other things, but they don't talk about the thing that actually pays for everything – and that is a stronger economy. And to have a stronger economy businesses have got to be confident, they've got to be investing, they've got to be taking people on, people have got to be getting off welfare and into work and when that happens you can do great things in this country. As we have done as a country for a very long time.

MURRAY:

I just thought of a question that might be slightly uncomfortable. I'll get to it in a second, but first your questions, sir?

QUESTION:

Yeah g'day Paul. How're you going, Scotty?

TREASURER:

Good, mate

QUESTION:

Mate, my question is about foreign aid. A couple of prongs to it. First of all, can you confirm how much we're spending this year? I know it's been frozen. But can you also confirm how many countries and how much money is donated to Australia in foreign aid when we have cyclones or bushfires or terrible things going on in our country? Do any of the other countries put their hand up? And with the foreign aid spending, do you personally approve what Julie Bishop is signing off on, or is she able to go around with her check book…[inaudible]

TREASURER:

Thanks, mate. First of all, it's four billion. It is frozen over the next several years. No, we don't put our hand out when Australians are in trouble to other countries. We look after ourselves, that's what we do. We are a prosperous country. And that's what we do. And on occasion, I mean, I'm not aware of any particular support we've received from other countries in those circumstances, perhaps there's been some. But we're a country which washes its face, we look after ourselves, and that's what we've worked hard to be able to achieve as a country .The foreign aid budget overall is approved as a package of what can be spent and then of course the Minister goes through and is very, you know, specific about what programs within that are approved. Now one thing that I think Julie Bishop has done really well in foreign aid is that with a limited budget, and by that I mean it hasn't been growing in the way the Labor Party wanted to grow it, we've kept it flat, but what she's meant, is she's focused it really hard on the areas that are closest to Australia – in the Pacific for example. And where there are other threats to us in the Pacific she's kept a very keen focus on how we have been investing in that aid in our own region in particular. But the other thing she's done is this: what she's done is she's put it more into aid that is more of a hand up than a hand out. It's actually helping a lot of these countries build their own economies so that they can be more successful. Yes there's emergency aid and we do all of that as you'd expect a prosperous country to do, but the other part of the aid budget Julie has worked really hard on, is making sure that we spend it better. I mean lots of people can come here and say we're going to increase this spending or that spending but, you know, we've got to start focusing more on how we spend money in this country, just not how much. And as a government, that's what living within your means means. Here's the means, the funding for foreign aid is capped at that, it's frozen at that, and it's Julie's job to spend it the best way that she can and I think she's doing a great job.

MURRAY:

What about, I mean, in terms of foreign aid, and I know this is getting into her lane, but philosophically, places like Indonesia: so Indonesia in Arche province flog gay people in public. They've now decided they're no longer going to do that, they're going to take it behind closed doors. Now, Australia would find that behavior understandably reprehensible. We just went through a whole process about same sex marriage and about inclusive debate around all of that. I think what some people have difficulties with about foreign aid, particularly with countries like Indonesia, is does it come with a moral string attached saying "we're happy to give you that hand up, but you've got to stop flogging gay people in public."

TREASURER:

Well that is diplomats and that's what foreign ministers argue and pursue when they're having those discussions. But let me talk about foreign aid in Papua New Guinea for example. Now we have a special responsibility to Papua New Guinea more than any other country in the world. Particularity, I mean, we all know why, you go back to 1942 and what happened in the Kokoda track and the many other things that happened in Papua New Guinea at that time. We have a special relationship with Papua New Guinea. Now we spend more than half a billion dollars and more on aid to Papua New Guinea. And there's us and then there's daylight in terms of who is supporting aid in Papua New Guinea and that money is very well spent. And it's also done to help the Papa New Guinean Government focus their Budget as well, so we'll say "look we're not just going to go build a road, what we're going to do is we're going to fund maintaining the road." Because anyone can go and build a road and put a sign on it and say "yippee aren't we great." But if you can't maintain the road, guess what, you're back there, and the road's useless. And so there's a lot more practical focus and yes they do have those hard conversations, Paul, they do. But they're done discretely and privately and this is where I think, you know, Julie, as out first female foreign minister, is doing a cracker of a job.

MURRAY:

OK, any more questions? Keep the hands up. Good foreign aid unlocked a few. I'll get to those in a second. But, in the Budget, big announcements for places like QLD was the M1 and the improvement between Brisbane and the Gold Coast. $5 billion about the train line between the Melbourne Airport and Melbourne city. The only problem is there's an asterisk next to both of those which is that the state governments have to agree. How do we get to the situation where, OK, you've got $5 billion but they have to meet you half way. Can't you find a project in Victoria, that you don't need anyone's permission for, you can just actually spend the $5 billion? Because I don't know about a lot of you guys, but there seems to be a frustration amongst most people where we hear big numbers, big projects, asterisk – never going to happen.

TREASURER:

Well I think with the ones you've mentioned I think all of them will happen but, Paul, I mean there are only two projects that I'm aware of where that's actually happening. One is Western Sydney airport, because we own it, and the other one is Snowy Hydro 2 because we own it. Everything else, if you want to build a railway line in Melbourne or if you want to build a railway line in Queensland, well that's owned by the State Government and they, at the very least, have to approve it. But at the end of the day, it's their job too. And I think Australians whether they're Queenslanders here, you know $5.2 billion of new projects announced in this Budget as part of a national new projects spend of $25 billion, they just want to politicians to work it out and get it done, I think. Now that's what we've said to the Victorians when it comes to Tulla rail. That's what we've said to the Queensland Government here. I think people grow very tired of politicians pointing at each other on these projects. These are real needs. We're putting real money on the table. On the hospitals agreement for example: I mean there's $30 billion for hospitals in this new five year agreement which Greg hunt has been working on. Queensland Government hasn't signed it yet. I really encourage them to do just that. And I hope they do. I'm confident they will. New South Wales was the first to sign up – fantastic. But State governments, Commonwealth governments, we've just got to work together. I mean, there will always be one of those Governments from a different political part from the other one, but our public expects us to just get those projects done and to do our bit.

MURRAY:

OK. We've got a question up here. I'll get to you, sir. What's your name and what do you want to ask the Treasurer?

QUESTION:

Ross from Rivina, down the Gold Coast. Treasurer, one of the platforms of your Budget is the corporate tax reduction, company tax reduction. I'm concerned that the reduction doesn't come with any feasible benefit back to the normal Australian. You're happy to reduce the tax in the hope that those companies, large banks, large corporates, will employ more people, thus generating more tax via payroll tax. Can you link that reduction in tax to some trigger, that if a company increases the amount of their payroll in their profit and loss then they get a lower tax rate?

TREASURER:

Look, it's an interesting question. Look for Australia successful our tax rates have to be competitive. I mean we all know more than 40 per cent of our economy is made up of two way trade. 40 per cent. It's a lot. And those companies need to be able to compete in the world. And for them to do that, we can't hamstring them with higher taxes. I mean we will have the second highest tax rate in the world and expect our businesses to go out there and compete. And if Donald Trump gets it, if the UK get it, they're taking their tax rate to 17 per cent, OK, that's about Singapore is, if the French, if President Macron can get it and know that having a competitive tax rates helps your business, then we need to get it to, because we are leaving ourselves very open and it's a tough world, and if we don't take steps to ensure that our businesses are competitive other countries will cut out lunch. So this is about the strength and competitiveness of our business sector. And you ask "well why can't I put conditions on it". Look, I don't think Government should run business. And it's simple, I think, the proposition. If I tell businesses that as they do what they do they have to give me more money, then I don't see how that means they can invest in their business or pay their staff more or invest in training or do any of that. And what we have to do, and remember at the moment it's small and medium sized businesses that have that tax relief and that's up to businesses of up to $50 million. So they're small and medium sized businesses, they're legislated. The big companies, they're not getting them for many years under our plan. For many years. And let's not forget that by the time a bank gets the same tax cuts as all other big businesses they will have already paid $16 billion in the bank levy I put in last year's Budget. So, you know, we're evening that score at that process. But when the Government comes in and says "woah we're going to do this but you have to fill out this form this form this form and then you have to do this, this, and this", we may as well just run the business. Any you know, Government has a great way of turning a dollar into fifty cents and business has a great way of turning a dollar into a dollar fifty so I'm going with them. [laughs]

MURRAY:

Maybe it's a point of politics rather than policy, but it seems that for want of a better term, the left, is a lot better at being able to invoke pretty much what you just did then about the rest of the world. The rest of the world is doing it on same sex marriage, we should do it too. The rest of the world is doing something about climate change, we should do it too. Well if the rest of the world is cutting company tax, how come that logic doesn't seem to stick as emotional?

TREASURER:

Well it's a good point, Paul, and it used to persuade Bill Shorten and now it doesn't. So look, I don't know. That's why I just don't think he's believable on these things because he's changed his positions too much.

MURRAY:

Alright. I've got a question. Let me go over here – just I haven't been over to this side of the room before. Let's start with you, fellow smoker, hello. We had a chat before. Alright g'day mate, what's your name?

QUESTION:

Ah, Brett.

MURRAY:

G'day Brett, what do you want to say?

QUESTION:

Ah it's about the energy problems in Australia. Both sides of politics don't look at wanting to open a coal fired power plant. What can Australian people do to try to convince their governments that this is what we want?

TREASURER:

OK, well the question for those who didn't hear it was about energy and coal. At the last election here in Queensland the LNP actually had a policy to do just that. Now they were unsuccessful at that election. They were actually planning to do just do that. Where a coal fired power station is built and when it can be built, the state governments actually have a lot of responsibility for that, as you probably know. All the Queensland power generation assets are owned by the Queensland Government here in Queensland, unlike in other states.

Look frankly over the last decade, the politics of energy has completely stuffed it and we've had too many subsidies in the system and we're getting rid of the subsidies from 2020. That's what is coming out of the system. We haven't focused enough on baseload power. I'm happy for a coal fired power station to be built anywhere but I don't think it should be subsidised more than anything else. It's got to stand on its own two feet. I don't want our kids paying more for power ten years from now because I decided to subsidise some other form of energy production. And if they can make it stack up, well they should get on and do it. Where we are focused, as I said, we own the snowy hydro scheme so no one else can do what we are doing there, we have to do that. But anywhere else, and if the Queensland Government wants to build another one, they can. Or a private investor can go and do it somewhere else. I think they should be able to do that. But let's not kid ourselves that it will generate power at the same cost as the old ones because they've been fully written off. And that's why the Prime Minister and I are keen advocates of keeping the ones we've got for as long as possible. They're very important and the longer we can hold onto those, it creates more opportunity and time for other forms of energy to come in. But our National Energy Guarantee, the National Energy Security Board has already found that that will reduce household power bills by $400 dollars on average per year. That's from 2020 onwards and there'd be improvements before then but that's the official figures that they've produced. Now they're not run by us; they're owned collectively by the state and territory Governments and ourselves. We're getting rid of the subsidies, that's key!

MURRAY:

But I've got to ask. When you talk about subsidies though I mean the assumption I would imagine of many in this room is that wind is subsidised…

TREASURER:

Has been yeah.

MURRAY:

So, in 2018, what is the system now? Is it a level playing field between all of these providers, or are we still keeping all of the subsidies for wind, solar, and all of these other things that have meant that when you have $5 billion. You say, I'm going to build a train line, you the Government…

TREASURER:

Yep.

MURRAY:

… say $5 billion. We'll build a train line in Melbourne if the Victorian Government joins us. But that $5 billion could build a power plant here?

TREASURER:

Well, I mean, we don't build power plants at a Federal level. The Queensland Government could do that if they chose to [inaudible] the previous LNP Opposition was planning to do that. But Paul, at the end of the day, you've got to get rid of the subsidies. Currently there's the RET Scheme that's been in place, and I was part of the Government back with Tony Abbott then that you know, extended the RET Scheme to where we have it now. That phases out from 2020, so the subsidies come out. All those new technologies, you know they've been built up in the past. They've now got at a critical mass and the cost, which means that they can be developed and run without the need for these subsidies. What concerns me, I mean politics is always a relative thing. So we're not changing the emissions reduction target. We're phasing on the renewable energy target scheme and the credit schemes from 2020. Our opponents want to put emissions reduction target from 26 to 28 per cent, to 45 per cent, and they want to take the RET to 50 per cent. Now, that can only put power prices up. So, I think there's a clear choice. I mean I'm not gilding that. That is just the fact.

MURRAY:

But okay, so you end up with this flush of extra money this year. Things get better in 2020. A lot of things get better in 2020 the way that all of this system works. Why not take the extra billions that you've got here, and give it to every Australian as some sort of a "hang in there payment" on power bills, because well I understand all the structural things that have been done in the Budget, but I mean hand up in this room…

TREASURER:

That's what tax relief is for…

MURRAY:

…If you would like a power cut, a power bill cut.

TREASURER:

Well I've got great news for you. If you're earning less than $90,000, right, $530 will pay one quarter's power bill. One quarter's power bill. That is the tax relief that is being delivered. Now it's going to be different for different householders. But a $2,000 a year, annual power bill, is what the tax relief we're providing to lower and middle income earners will deliver. Now if it's a two income family, on average incomes, that's a half a year's power bill. And remember when we got rid of the carbon tax? That saved $500 that would otherwise have been on an annual power bill. So as a Government, we've acted on getting rid of taxes that shouldn't be on energy. We're acting to phase out the subsidies that are there currently. And we're providing tax relief, which means that people will have that $530 to meet those power costs.

MURRAY:

Okay one last question before the break. G'day, mate what's your name?

QUESTION:

Fernando from Westend.

MURRAY:

Hello brave man, have a look at the Treasurer. Tell him what you want to, what you want.

QUESTION:

Hi. Congratulations on a well delivered Budget.

TREASURER:

Thank-you.

QUESTION:

With the tax cut for companies, I can see how it helps to grow businesses and how can it create more jobs. However, I still struggle to understand how a tax cut in companies will translate into higher wages.

MURRAY:

That's a good point.

TREASURER:

Well basically like this. The more money the Government, businesses have to give the Government, the less they can invest in training, wages, investment in their own company, all of those things. Also, when they can do that, they can grow their business, which means they can also pay their staff better wages as their businesses grow. And that's basically the principle. The more we leave the money in the hands of the people who made it, the more likely it is that they're going to make more and be able to spend that on their businesses and the people who work for them, because good businesses always understand that the success of their businesses are in the people that make that business. And I particularly see that in small and medium size businesses. I was down at True Blue Glass today, down on the Gold Coast Hinterland there, with Bert Van Manen. Now that's a business that's just under about $4 million in turnover. The success of that business certainly its owner, family business, but it's also in the people who work for Bill down there and make that difference. Let me make this point also on tax before we go to the break. We've been acting on multinationals, and let me tell you how much. Each year now there is $7 billion of revenue, of sales that are being made by the multinationals now that is in our tax net. Wasn't there before. No tax being paid on it before. Now it's having tax paid on it. We introduced laws not long after I became Treasurer. Joe Hockey originally drew them up and then we got them passed through the Parliament. Labor voted against them. And we're now having almost $2 billion a year in extra tax coming in by cracking down on multinationals. Our Diverted Profits tax, which was in last year's Budget, the taxes that are being paid on Netflix and all of those other digital companies that are coming in and selling you services from offshore. It's now in the tax net. And particularly on things like that, that's GST, so that money's coming back to Queensland in hospitals and police and services. There's $6.1 billion extra in GST revenue flowing to the States and Territories from the stronger economy and the changes we've made to capture those multinationals.

MURRAY:

Alright, round of applause for the Treasurer. Plenty more in a second here. Thank-you mate, this is good this is fun.

TREASURER:

Good.

MURRAY:

Plenty more from North Lakes in a second here on Paul Murray Live.

[break]

MURRAY:

Welcome back to North Lakes. That's 45 minutes north of Brisbane. How good is this? This is fun. This is not bad. Thank you very much everyone. Special edition of Paul Murray Live here with Treasurer Scott Morrison who's answering your questions about all sorts of things to do with the Budget, and there's a thorny question that somebody couldn't wait to ask…

TREASURER:

Yep…

MURRAY:

So they did it when they were off the air, but we're going to do it again on the air. Okay? This is probably the question that deficit hawks like me and, you get annoyed when I talk about it all the time only because I talk about it all the time, the question of spending.

QUESTION:

Why are we still spending, why are we not pulling back on the spending, we see Julia giving out that stuff. Julia Gillard, Julia, oh god.

MURRAY:

I know what you're saying.

QUESTION:

Yeah. Why are we still not bringing it back so we can stop the spending, you're still spending?

TREASURER:

Well let me. Thanks for the question. I'm really glad you asked that. Growth in spending under this Government and in this Budget is 1.6 per cent. That's above inflation over the next four years. Since we came to Government in 2013 that has been an average of 1.9 per cent. That is the lowest level of growth in spending in 50 years. Now, let me tell you what was the previous Government's. For the Rudd, Gillard, Rudd Government, spending grew every year on average rule 4 per cent. Under the Howard Government, it was 3.3 per cent. Under the Hawke-Keating Government, it was slightly less than that. It was almost 3 per cent. Under the Fraser Government, it was over 5 per cent, and under the Whitlam Government they didn't have records that could run that high.

MURRAY:

[laughs]

TREASURER:

So, by getting spending growth under control, anyone who runs a business knows this. What you have to do is this, what you have to do is you've gotta get a cost curve that looks like that, and you've gotta get it to go like that. And so we inherited spending growth of 4 per cent, and we've got it down in this Budget to 1.6 per cent. And that means at the end of the four years of this Budget, our spending as a share of the economy will be below the 20 year average. It'll be down to 24.7 per cent. Now, again it's, that's like wrestling down Andrew Fifita, getting spending growth under control. You got to get on it, and you got to stay on it. And look we have, I'm not going to complain about it. We haven't had always the great help from the Senate, and the Labor Party has tried to block us all the way. But even still since the last election as Luke Howath knows, we've been able to get $41 billion of Budget savings and improvements through this Parliament. Now people said after the last election, some of you might have said it on Sky, not sure Paul. But they said nothing would happen. It would be a Government that did nothing. $41 billion in savings in other measures we've got through this Parliament, and we're going to keep going for it. And we're going to keep keeping that spending under control because that's how you pay down debt. You don't tax your way to paying down debt. That just puts an unreasonable burden on Australians. If you allow taxes to grow too high, that's why you have a speed limit. It's like a snake eating itself from the tail. That's what I think should be the image on the front of the Labor Party tax policy because that's what the economy will look like. A snake eating itself from the tail. So you keep taxes under control, and you keep spending under control. That's how you do it. If you allow yourself to just run taxes up until the never never, guess what will happen to your spending? It chases it. So keeping taxes under control keeps spending under control. And every time you hear Labor say, "no we don't need this control on taxes", you know what they're really saying is, "we don't want a control on spending."

MURRAY:

Well what about in raw dollar terms. So there are more people than ever before. The participation rate's never been higher before.

TREASURER:

Correct.

MURRAY:

The raw number of dollars going into the Federal Government is higher than it has ever been in Australian history.

TREASURER:

And the demands on what government has to deliver has also been higher than it has ever been in history.

MURRAY:

Correct. But that's the thing. When we talk about spending…

TREASURER:

Yeah.

MURRAY:

…the logic is we understand that there are more people who need to go to hospital, more people this, but…

TREASURER:

More people in aged care in particular. I mean aged care, aged care and child care are the biggest growing parts of the Budget.

MURRAY:

But the struggle for people is when they see a big raw number that's billions of dollars bigger than the big raw number last year, yet we're still in bloody deficit.

TREASURER:

Well think about the size of the economy. Over the next four years, the Australian economy will grow to being $2 trillion in value. $2,000 billion in value. Now that's significantly more than it was ten years ago, and it really does beg the question about who do you trust to run a $2 trillion economy. It's a pretty serious question. Very serious question. And so the economy's bigger. That means the services are greater, but planning for ageing is also, and maybe someone had some questions on aged care. We were just chatting up the back with Lucky Steve about ageing because his wife works in aged care. And we've all got to prepare for Australians living longer. Now I think it personally, it's a good thing that Australians are going to live ten years longer than we thought previously about a decade ago or thereabouts.

MURRAY:

I've got a young bloke who wants to ask a question. Good on ya, mate. Snappy dresser, I love it. What's your question for the Treasurer?

QUESTION:

Hi I'm Thomas Woods. I'm a student of economics at UQ, and so would we've heard previously you talk about cuts to higher education, and I was just asking, given that we've got evidence coming out of the US suggesting that the average undergraduate degree is worth about $1 million in future income over the course of a lifetime, why is it that we still subsidise on top giving out free loans to students? About half of our degrees. So why is the working class Australian paying for the future riches of champagne socialists?

MURRAY:

Well done, Son [laughs]. Well done. Middle stump. Middle stump. Sign him up.

QUESTION:

Keep that up you'll get the 8 o'clock shift on Sky.

MURRAY:

[laughs].

TREASURER:

Look out Ross Cameron.

MURRAY:

[laughs] On ya Rosco.

TREASURER:

It is true, but to go to the substance to your question. It is true that as a country we do a lot of amazing things. In this most recent Budget, I announced we were going to fund through the Pharmaceutical Benefits Scheme a drug for Spinal Muscular Atrophy that will save a family who would otherwise have to pay $370,000 to keep their child alive, a $40 subscript. Now I say that in the same sentence about yes, we do subsidise about the cost, a bit more than that actually, of Australians going to university in this country. We're an amazing country. I think Australians can fill very proud about those sorts of things. That's not the Government giving itself a pat on the back. I think you should all give yourselves a pat on the back for these sorts of things. That's the sort of country we're in. That's the sort of country that I think when, you know, the Federation was formed over 100 years ago, or when you know, Captain Cook came around past Bate Bay there and though that'd be a great place for a rugby league down there at Cronulla…

MURRAY:

[laughs].

TREASURER:

But they said that was going to be the sort of society that we're creating. And I think that's fantastic. But we're not mugs either, and there has to be limits to this sort of stuff, and there has to be results, and there has to be responsibility taken when we received these benefits, and when we pay for them we've got to understand who does pay for them: as I said before, less than 25 per cent of Australians paying 65 per cent of the tax. So, you got to be mindful of that, and where you can provide relief for people, where you can say to people as we have in this Budget, there's a limit on how much we're going to tax Australians -23.9 per cent of the economy. We don't think we should go above that. When we get close to that, you got to change the tax system to make sure that you don't go and do that, and you live within your means, even the ABC.

In last year's Federal Budget we talked about adding some reforms to superannuation, and one of the parts that really interests myself was allowing retirees between the age of 65 and 75 to be able to contribute to super and not meet the work test. That was exciting in my role, because it meant a lot more people were going to be able to participate in things like retirement income streams. I think the Government seemed to get lazy on selling that idea to the Opposition, and there wasn't, it didn't seem like it from our point of view much argument as to why that got abolished. Could you give anymore thoughts to that?

TREASURER:

Couldn't get it through the Senate. That was the bottom line. I thought it was a really good change. I was very keen to see it pursued, but you know, you got to play what's in front of you. And you know, we could keep it there and pretend it was going to happen and tell people that but that would've been I think misleading them. I think it's a good change and in this Budget we made a slight improvement to that again. It means where people can contribute for a little longer. Also for older Australians, we're changing the pension work scheme, work bonus, which means if you own your own business, you never got access to this before. You can now earn $7,800 a year in that sort of income. And I met a woman the other day who does house sitting, and she gets it paid into a company. Now that won't affect the pension she gets. So we are making some of those changes but we also have to operate within the Senate, the Australian people elected, and sure that can be frustrating at times and I share your frustration particularly on that measure as I know Kelly O'Dwyer does, because we worked hard on making sure people contribute for longer. And perhaps in the future, we'll be able to have another crack at that.

Just wanted to take you back to the company tax question for a moment. We've heard a lot of talk from the opposition about the $60 billion tax cut to big business and all that sort of stuff. But I'm really interested if you can put it in context for us. How much tax are those companies going to pay over the corresponding period just so that we can sort of get a feel for it?

TREASURER:

Good question. Each year, company tax revenue at the moment is about $67 billion a year. Apparently, when the Labor Party says companies don't pay any tax, well there must be some sort of tax fairy that turns up on my door with $67 billion from in company taxes that are paid. And those company taxes are growing as they continue to do well, and I think that's really good. So, you know, it is a, you know multiply that number by actually ten and more, and you're talking serious numbers in terms of what companies are paying in to the tax base of Australia, and giving them relief makes them competitive. That's what it's about. It's about ensuring our businesses remain competitive. But here's the line what Labor's saying. Budgets are actually done over four years. Okay? So what would you think was the biggest tax measure that Labor has announced, for what would be their first Budget? I'll tell you. It's not taxes on big companies. That won't change one drop. The big companies don't get their relief to make them more competitive to well beyond those four years. The biggest tax that Labor has announced that they're going to levy on Australians, is their retiree tax, which is ripping off the refunds of those Australians who own shares where they get the refunds because of the franking credits that come from those companies. I met a woman today with Luke. That is her entire income. She's a self-funded retiree. She lives off those refunds. It's her entire income. So we're not talking about her losing a bit. She's losing the lot. They are going to raise almost $11 billion in just two years from that. So when Bill Shorten says to you, 'we're going to provide this extra relief by cracking down on the big companies'. I have an [inaudible] for you. That's not true. They're cracking down on nonna, nanna, and yaya. That's who their taxing. And it's why I sort of said yesterday, on Mother's Day under the Labor Party. You'd better go and thank each of them because they'll be paying some pretty heavy taxes, and that's not, that's not right. That retiree's tax is nasty. It's real nasty. And it is punishing those who simply went and bought shares in Australian companies to live off the franked dividends.

QUESTION:

[inaudible]

MURRAY:

Alright I've got to…

TREASURER:

Dividend imputation was originally introduced by Paul Keating. But the way that this thing has been announced by the Labor Party just shows you how addicted to tax they are. And the reason they're addicted to tax is because they're addicted to spending.

MURRAY:

Alright one last question before we do another break. And the beer's half-drunk so this will be fun.

QUESTION:

Thanks Treasurer. My name's Nelson. Paying less tax the Federal Government's great. But when we've got Annastacia Palaszczuk appear introducing something like five new taxes in her Budget, I suppose my question is, what can you do to make sure that when your giving money back to us, the State Government aren't taking it back out of our pocket?

TREASURER:

Well you can vote LNP.

MURRAY:

[Laughs]

TREASURER:

But I mentioned before what we've been doing on the GST, and there's $6.1 billion extra in revenue that is going from the GST into the States and Territories over the next four years. By us improving the system basically. And that means more money for schools and hospitals and so one. But look, every Government's got to be held accountable by the people who elect them, and we don't think higher taxes is the way to run a stronger economy, the economy you want to live in. Someone asked me the other day, 'what's in this Budget for young people'. When a young person leaves school or leaves training, does their cert, or does their trade, the economy they walk in under this Government, that's where they're going to get their job. And over the next seven years, people say won't you split this personal tax plan? Because that young person is going to start off at this wage, and they're going to work, and they're going to work hard, and they're going to work hard. And what I want to make sure to them, and make that promise to that young person is, as you, as you move ahead in your career and in your working life, we're not going to allow you to go into higher tax rates simply because you've been putting the hours in. We've got a plan to deal with bracket creep in our personal tax plan. I mean I don't want young Australians to just work for the next four years and give them a tax plan for the next four years. I want to give them a plan that's going to ensure that they don't have to look at bracket creep in their working life. That's why the whole personal tax plan should be supported. Because it's a plan that gives young people in particular encouragement and provides the economy where they will get their first job, their first job, under a Turnbull Government. And there's more likely of that happening under a Turnbull Government than the alternative.

MURRAY:

Alright thank-you so much Treasurer. Stick about. Another break here on Paul Murray Live. Plenty more with the Treasurer and then Ross Cameron, Janine Perrett, Gary Hardgrave, Peter Gleeson. Have a look back at what's happened. More in a sec.

[break]

MURRAY:

Welcome back to North Lakes. Having a good time? Treasurer Scott Morrison is here. We've got about ten more minutes so a few more questions. And let's, I'm going to have to switch chairs, sorry. And he parted the chairs [laughs]. Closest I will ever get. [laughs]. What's your question? Hello.

QUESTION:

Hi, I'm Sarah. I'm just wondering what on earth is going on in aged care. You've got these companies that are making massive profits. They're draining elderly people before they die essentially. The Government's giving them lots of money and yet they continue to make massive profits and it's certainly not going back into aged care where it's supposed to go.

MURRAY:

Great question.

TREASURER:

In this Budget, we put a lot of focus on the ageing of the population. I said before Australians are living longer and healthier and that is a really good thing. But we want Australians to be able to age with their dignity, and we want them to be able to maintain all the choices they've had about how they want to live their life. And the key pay part of that decision is where they decide they want to stay at home, and they want to age at home. And so in this Budget we've increased the number of in-home care places. So not in residential care but at home by 20,000. 6,000 we did in December and 14,000 in this Budget. And that means for those Australians they'll be able to be at home for Christmas dinner. They'll be able to be there for kids birthday parties. They'll be able to do all those things that really matter and that's why they want to stay at home. Not only connected to their family, but connected to their communities and, but there needs to be a great deal more support that's provided to help people do that. Now that's where people are increasingly making those choices. And so we've provided for that in this Budget to support those choices. And they're at the high level care places, I should stress. So at that top end where it's really particularly needed. Where people might otherwise have to go into residential care. But in residential care also, we're increasing the support that we're providing in rural and regional areas. We've also providing support for mental health in residential aged care. So people combatting loneliness and depression, which is rife in a lot of these places. But we've also got to stand up for older Australians who are living in these centers and stand up against elder abuse and there is a raft of things we've got in this Budget which is protecting their rights: an aged care Commissioner, which is going into exactly the sorts of issues that you're talking about and giving them the power to ensure that happens. Now, there's no doubt some aged care facilities which would fit the bill that you've described to a T. And then there are others who you'd be very fortunate to have your own family living there and ageing in that place. Why in my experiences I've moved, whether it's in my electorate or the many other places I've visited around the country, and I've visited many of them. I was Social Services Minister for a time, and I've seen a lot of great people who work in aged care. And it's actually one of the strongest growing sectors of employment in our country because we have such an ageing population. And we are very good at it. But we need to make sure we maintain the standards and we maintain the dignity of Australians. Just becasue you get older shouldn't mean sacrificing your dignity. That's not the sort of country we are.

MURRAY:

Alright. Question up the front here and then I'll go right up the other end cuz I need the exercise.

QUESTION:

G'day Scott.

TREASURER:

G'day.

QUESTION:

Welcome to Brisbane. As you may be aware the State Government passed vegetation management laws which I regard to be disgraceful. My question is firstly what can your Government do to help some of the farmers who are affected by this and also more broadly what's the Government and what's the Budget got for agriculture in Australia?

TREASURER:

Yeah great question. Yeah thanks for that. Thanks for that question. First of all, on the vegetation management issues, I mean, they're the domain of the State Government and you got to hold them accountable for what they're doing there but for the Budget. On the Budget we're investing quite a significant amount in upgrading the satellite technology, the GPS technology and the Bureau of Meteorology's technology platform. Now that might sound like a whole bunch of white coat stuff to most other people, but for farmers it's a big deal. This is the data they live and breath by and by improving its accuracy and its functionality and the technology of that, that is a big deal for farmers. And David Littleproud, the Agriculture Minister, this was something along with Matt Canavan and they were mad keen that we went and invested in these things becasue it really is the tools that farmers to be able to run their farm better. I mean it's hard enough being at the mercy of the weather, but when your own technology isn't keeping up with that, that's no good either. The other thing we're doing is we're putting a lot of technical experts in the field. By that I mean over in the overseas markets where we're trying to crack them. Now we all know, our Government's done very well when it comes to cracking trade deals offshore, but then there's all those you know the little bits, well you know all the technical specifications that they add to it and all the rest of it, so we're putting people into those jobs overseas to negotiate a way and deal with a lot of those very technical things which can stop your product getting in the market. And the third thing we're doing for farmers, which is also really important, we're investing in the biosecurity at the border. So pests, weeds, animals, things coming in, biosecurity risks at the border. There's one thing I think, probably people know about me: I'm pretty keen on border protection. Now that's not just about stopping illegal boats, it's about protecting our farmers from the things that can come and wipe them out. So biosecurity, dealing with things at the border, investing in the technology that supports farmers, and continuing to invest overseas to make sure we can open up the markets for them.

MURRAY:

Alright we're going to have two more questions. So get ready to fight hard for the last one. What's your question mate?

QUESTION:

G'day Scott. Adam from Brisbane. Just want to ask about the $500 million investment in the Great Barrier Reef. Now that's a huge investment. It's one of the biggest I've heard of, and I'd just like to hear kind of where it's going and how that'll help farmers. You've talked about farmers in your last talk but I'd like to hear a bit more about that.

TREASURER:

Yeah well that's something that Josh Frydenberg has been passionately advocating for, and we're doing it through one of the local organisations up there who will be managing that for us so it's people working on the Reef already. It's just not Government agencies driving around in big white cars or anything. It's actually about funds going into research in the Reef, and Reef management practices as well, and improving all of that, and dealing with the multitude of risks that exist for the reef. And you're right, that investment does a number of things. Yes it protects our environment, but the livelihoods that depend on the reef in north Queensland are critical. I mean it's tourism, it's fisheries, it's environmental management, it's the whole works. And this is a massive investment in the research and capability of what we need to actually look after the Reef for all the right environmental reasons, but also by looking after the livelihoods of the people who depend and live off the Reef.

MURRAY:

Alright last question of the night and then let's get into this here. Go for it mate what's your name?

QUESTION:

My name's Ian, I'm a former student, former railway worker, I'm one of these ones I'm not a socialist, nor do I drink champagne but I've been to university. We understand that, or I understand from reading the Budget, that you've put something like $10,000 up there to employ older Australians.

TREASURER:

That's correct.

QUESTION:

Right. That's great. Some friends of mine and myself, we're all sort of more mature people, and we've been looking for jobs. One of them has, the last 18 months, about 3,000 job applications.

TREASURER:

Yep.

QUESTION:

And the moment they get to see you, and see that you're heading the other side of 60, well and truly, you miss out. So what are you going to do with those laws that you have to beef that up? Because we want to work.

MURRAY:

Great question mate.

TREASURER:

Yep good on you. One of the key ones is the one you mentioned. And that's the wage subsidy of $10,000, and that's over 55. And but we also have to combat age discrimination in the workplace. But we also have to help those older Australians and look I just turned 50 on the weekend so I'm not thinking 55 is as old as I used to, but to transition their skills as well. And there's resources in the Budget to support people to do a check on what their skills are what skills they might need. Now in the case that you're talking about, I know that employers value the experience, the wisdom, of older workers, the reliability…

QUESTION:

[inaudible].

TREASURER:

These are all good things. But then they might have question marks, on you know technological skills and things like that, and so we've got to bring those up and even up the score for older people who are looking to work and want to work, and are keen to keep working because if you're healthy and you're, you know, you stay connected, and you want to increase your living standards, well you have that opportunity to do that. And the Budget, when it comes to ageing, is trying to deal with the health issues that older Australians face. And there's a package in there to keep working with local sports and community organisations to keep older Australians active and connected in their communities. There's a package there which is about dealing with the work skills and allowing them to earn more without risking pensions and things like that, and as well getting the wage subsidies for employers. It's also at the more advanced level and we're talking about the aged care places which we talked about and protecting their rights. But protecting their rights is also ensuring that they're not mistreated in the workplace and they're given a fair go in the workplace. So I would encourage Australian businesses all around the country to do this. Let me leave you with one last stat, Paul.

MURRAY:

Course.

TREASURER:

Last year 415,000 people got a job. Now in Queensland, on the more, the numbers just before that, so it's around about the same proportions okay? So all those people that got those jobs, record jobs growth. One in five of them were Queenslanders. Let's hear it for Queensland.

AUDIENCE:

[clapping]

TREASURER:

One in five of them were men aged over 55.

AUDIENCE:

What?

TREASURER:

Now you know I heard the 'what?!' What that says to me is Australia has done something amazing in the last few years. We've gone through one of the biggest changes our economy has ever seen coming off the mining investment boom, and that's been felt here in Queensland, particularly in north Queensland where I'll be going over the next few days. They've felt that hard as they have over in the west and in other parts of remote and rural Australia. But what that told me in that figure is that as people have not had the job they used to in some of those other industries, they're picking up jobs in the growing stronger economy that we have today. And that's why the Budget is a plan for a stronger economy. That's what pays for everything else. And that's what we believe in and we're getting great support from Australians for delivering, and that's what we'll continue to deliver so thanks very much for everyone's attention tonight, and the opportunity to be here at North Lakes.

MURRAY:

Good. Thank-you very much Treasurer, give it up for him.

TREASURER:

Cheers.

MURRAY:

Thank you mate appreciate it. Thank you. Very good. Scott Morrison we do appreciate very much that you've come here to [inaudible] with these people. You're with us on Paul Murray Live.

Well good morning everybody, and welcome to the fabulous electorate of Forde, and particular I’d like to thank Bill Leavey, the owner of True Blue Glass. Bill thank you for having us down here today, and my good friend the Treasurer Scott Morrison. The reason we’re here today is to talk about what this Budget is going to do for small business in this country, not only from the point of view of extending the instant asset ride-off, but also very importantly, and Bill has been a great advocate for this over the years, the value of building infrastructure for the Australian community. And we saw in the Budget confirmation of our $1 billion funding announcement for the M1. And it’s businesses like True Blue Glass and many others in my electorate of Forde, who will benefit directly from this new investment to complete the upgrade from the Logan, from the Gateway to Daisy Hill, and other projects as well across the state. So, on that note I’d like to thank the Treasurer for his support and I know that I’ve spoken to him often about it. But it shows the value of continuing to persist and talk to your senior colleagues about the issues that are important in local electorates right across the country, and for the electorate of Forde, this is a terrific investment in the future of this community. I’d like to invite the Treasurer to say a few words.

TREASURER:

Thank-you very much Bert and to Bill, great to be here at True Blue Glass, and it’s wonderful to be here in Queensland today. And I just want to reassert what Bert was just informing you of. This is one of those businesses that are the backbones of the Australian economy. At the last election, we said that we wanted to cut taxes for businesses just like this. Businesses with a turnover of greater than $2 million. Businesses that are a small business. This isn’t a multinational. This isn’t a Google headquarters. This is a hard working Australian-owned small business doing well here on the coast and creating jobs for Queenslanders. And at the last election we said that we would cut their taxes, and we have done that. We have cut the taxes for this business, and we have been cutting taxes for other businesses employing millions of Australians and millions of Queenslanders.

Now in this Budget, we’ve gone further. In this Budget, we’ve extended the instant asset ride off. In this Budget, we’ve gone further to crack down on anti-phoenixing. Now anti-phoenixing is something that really hurts small businesses, phoenixing I should say. This is where businesses use the tricks to go bust and then not pay their bills to be businesses just like this one. And it’s important that we protect genuine hardworking businesses doing the right thing from others who’d seek to do the wrong thing by them. And so whether it’s cracking down on phoenixing, whether it’s extending further tax relief to businesses just like this one, or through extending the instant asset ride off. But importantly as Bert says, ‘investing in the infrastructure on which businesses like this depend’. It’s no good for Bill to be having to pay people overtime to be sitting in traffic jams out there on the M1. So it’s important that we invest in this local infrastructure as Bert has championed and fought for. A billion dollars, down to ensure that we get that much needed upgrade for the M1. But it’s not just that. Boosting the Bruce to the north of Brisbane as well. And even on public transport [inaudible] with Brisbane metro, where I was earlier this morning. Investing in the infrastructure that Queensland needs, that south-east Queensland needs, to ensure that businesses can prosper, and commuters and mums and dads can get to and from work and be home in time to actually spend some quality time with their families.

These are the essentials that Queenslanders rely on, and these are the essentials that the Turnbull Government is delivering by creating a stronger economy for the whole nation. A stronger economy for Queensland, and a stronger economy for here in south-east Queensland on the Gold Coast and in the coast area. So, that’s what we’re delivering as a Government in this Budget. But it also means we can guarantee the essential services that Queenslanders also rely on. With more funding for hospitals. I mean we are providing through our new hospitals agreement, a 34 per cent increase in funding for hospitals in Queensland. That’s more than $7 billion extra for hospitals right here in Queensland. And we’re inviting the Queensland Government to come and support us, to get on board and sign up for Queensland, sign up for hospitals in Queensland. We’re delivering extra funding for hospitals here in Queensland. And we’re keen to work with the Queensland State Government to make sure we can deliver that funding and support the hospitals. That we can deliver the M1 upgrade for infrastructure here in south Queensland. I think the public wants all levels of Government to work together to deliver these important services. They don’t want to see us playing politics over this stuff. They just want us to get on with it. And so we’ve got that agreement there, we’re encouraging them to come on board and be part of that just like we are here on the M1. A lot of funding for infrastructure in Queensland in this Budget. $5.2 billion worth of investments in critical economic infrastructure that is going to create a stronger economy here in Queensland and across the nation.

So, Bill thanks very much for the opportunity to be at your business here today. Congratulations on what you’re achieving. You’re working hard and we want to make sure that all Australians get to keep more of what they earn. All Australians. That’s what our personal tax plan is about also. Ensuring all Australians can keep more of what they earn. It’s a clear plan to make taxes lower, simpler and fairer. Low and middle income earners first. Dealing with bracket creep. Making the tax system simpler. 94 per cent of Australians being able to pay no more than 32.5 cents in the dollar. That’s a real plan. That’s a sensible plan that’s been well thought out, and we’ll be putting, we’ve already put to the Australian Parliament. But happy to take questions.

QUESTION:

Treasurer why do you think Malcolm Turnbull has received a popularity boost off the back of the Budget but the Government hasn’t according to the latest news poll?

TREASURER:

Our Budget is a plan for a stronger economy, and the Budget is being well received as a plan for a stronger economy. A plan for lower, simpler and fairer taxes for all Australians. A plan to see businesses grow and invest in more jobs. More than 1000 jobs a day being created over the last twelve months according to the Australian Bureau of Statistics. It’s a plan that’s keeping Australians safe with our investments in firming up the security of our airports, international and regional. It’s a plan that’s delivering for the essential services that Australians rely on through a stronger economy, including more money for hospitals here in Queensland. And it’s a plan that is ensuring that the Government lives within its means.

We’re keeping control of taxes and we’re keeping control of spending, and we’re paying down the debt from now, and that will see debt fall by $30 billion over the next four years and $230 over the next ten years. That’s a responsible Budget. A Budget that is a clear and strong plan for the Australian economy to grow and be stronger.

QUESTION:

Treasurer can you identify exactly what steps have been taken to boost the number of women in the Parliamentary Liberal Party and on the front bench?

TREASURER:

The LNP, like all the divisions of the Liberal Party, is a rank and file movement, and our rank and file members are the ones who decide who stands for them at every election. Amanda Stoker, as you know, was recently selected to fill the place of George Brandis in the Australian Parliament, and we welcome that. And the rank and file members of the Liberal Party are the ones who decide who represents them at each election, and here in Queensland it’s the LNP and Canberra shouldn’t be messing in the affairs of Queensland. And it’s not something, that’s not how our Party operates. Our party operates on the basis of rank and file preselections of party members here in Queensland and it’s Queenslanders who are deciding who are representing us here in QLD not Canberra.

QUESTION:

Are you concerned that some women in the LNP are threatening to quit over this?

TREASURER:

As I just said, the LNP is a rank-and-file organization where Queenslanders decide who represents them in parliament not Canberra.

QUESTION:

One Nation and Senator Lyons are calling on you to split the income tax package, why won’t you do that?

TREASURER:

This is a full plan. This is a plan that has been well thought through, which delivers tax relief for all Australians. See, what I find amazing about the Labor Party is they are happy to commit the Australian taxpayer to spending off into the never never but they are not prepared to actually go into the parliament and vote for tax relief for all Australians into the future. If the Labor party are prepared to commit Australians to more spending, then why aren’t they prepared to support taxpaying Australians to give them the certainty of tax relief? Under our plan, someone who’s earning an average wage, fulltime wage, today, over the next seven years will pay less tax under the Coalition. Under the Labor party they will pay more tax over that period because Labor refuses to deal with Bracket creep. See what Labor have done is give a political response to the Budget. It’s not an economic response. It’s a pre-election thing that politicians do - that’s what you’ve got from Bill Shorten. I mean remember at the last election he said we were going to sell Medicare for goodness sake. I mean it was just a bold face lie. Bill Shorten’s not believable. He’s not believable. Our plan has been well thought through and we will continue to work constructively and respectfully with the crossbenchers to demonstrate how this plan delivers for all Australians. It actually gives all Australians an encouragement and a reward for the effort they put in and the certainty of getting that tax relief. Over the next seven years, we start with low and middle come earners and we move to eliminate that bracket creep which puts its hands into people’s pockets as they do better. That’s what Bill Shorten will be doing. And then the third stage of that plan is to make the system simpler so 94 per cent of Australians won’t pay more than 32.5 cents in marginal tax rate. That’s a simple plan, it’s a fair plan, it’s a responsible plan. It’s a plan that gives Australians certainty and that encouragement that the more effort they put into, the Government won’t be taking more out of their own pockets.

The other thing I’d say about the plan is this: our plan is not paid for by putting higher taxes on businesses, like Bill’s here, like the Labor party is saying. It’s not a plan that puts higher taxes on Australians. We have got a clear tax speed limit. Bill Shorten has been running around saying that the Government’s plan is based on big businesses getting big tax breaks. Well over the Budget and forward estimates, what Bill Shorten’s plan is based on is ripping the money away from self-funded retirees and retirees all around the country. And it’s been funded by him putting his hands in the pockets of small and medium sized businesses. 80 per cent; 80 per cent of that enterprise tax plan, over the next four years: that is what was being received by small and medium sized businesses just like Bill’s here. So Bill Shorten wants to put his hand in Bill’s pocket here to pay for his political promises and we don’t think that’s the way to run an economy.

QUESTION:

How can you say a rank-and-file preselection up here [INAUDIBLE] yet your very own one, in Cook, the candidate says he was forced to quit to make way for you? Isn’t that hypocritical by yourself?

TREASURER:

Well your record of the event is completely wrong.

QUESTION:

So the preselection, the rank-and-file preselection…

TREASURER:

I won a preselection. Back then, I stood for preselection and I was successful at the preselection. It was done by a preselection of both local and federal component members in accordance with the NSW constitution. So you should check your facts before you ask the question.

QUESTION:

So you are saying that there was no intervention?

TREASURER:

No there wasn’t. There was a rank-and-file preselection. There was a rank-and-file preselection.

QUESTION:

So the preselection candidate wasn’t forced to resign?

TREASURER:

There were issues with that candidate at the time.

QUESTION:

What were those issues?

TREASURER:

Well you can go back and check over the record.

QUESTION:

Will the Coalition pursue any Labor MPs….

TREASURER:

And let me just stress, that was done by the NSW division of the Liberal Party. Divisions handle their own preselections. So, I entered parliament, selected by my party, and have been pleased to represent my party at every election since then. Canberra shouldn’t interfere in State preselections. They didn’t interfere on that occasion. Those decisions were taken by the NSW division and a further preselection was held of which I was successful.

QUESTION:

So you wouldn’t be opposed to the LNP interfering in the preselection…

TREASURER:

Canberra shouldn’t be telling Queensland what to do.

QUESTION:

Will the Coalition pursue any labor MPs facing fresh questions over dual citizenship or do you think those questions marks have sort of been answered?

TREASURER:

Well Bill Shorten should be dealing with his own mess on his side. I mean, what we do know about Bill Shorten on this issue is, once again, rolled gold guarantees from Bill Shorten aren’t worth a Zack. And that’s why he’s just not believable on anything he puts forward. You know, he went forward with bold faced lies - bold faced lies to the Australian people at the last election; tricking voters down in Tasmania saying that the Government was going to sell Medicare. I mean it was just a lie. He was doing it all over the country. He was doing it here in Queensland, here in this electorate of Forde. And people know that when Bill Shorten gives a rolled gold guarantee you can’t take it anywhere, let alone to the bank.

QUESTION:

Can I just ask you about your event tonight? Are you looking forward to being grilled by 120 voters in North Lakes?

TREASURER:

I’m very much looking forward to getting up there to North Lakes tonight there with Paul and I think this is an important part of the process around the Budget, to be able to sit down with every day Australians and talk to them about what the Budget means for them and answer their questions. Because, you know, I’m confident in the plan, the strong plan we have for a stronger economy - the plan that we have for tax relief for all Australians. Well Bill Shorten, he’s going out there and he’s picking some, and he’s punishing others. His plan is based on bitterness and envy. That’s not what Australia was built on. Australia was built on aspiration and hard work and people getting reward for their effort. Not envy and bitterness. Our plan is for a stronger economy and that’s what I’m looking forward to discussing tonight with PM, with Paul Murray, and with the people up there in north Lakes and Luke Howarth as well. And I think it should be a good honest discussion tonight and I thank Paul for inviting me to come and do it.

And as it happens, you’re celebrating a milestone, turning 50 today. Happy Birthday.

TREASURER:

Thanks very much, Barrie.

CASSIDY:

Still young for a Treasurer, but the fact is though, if you were to lose the next election and you would have probably not another opportunity to produce a surplus, no Liberal National Government has ever failed to produce a surplus. This might be a missed opportunity for you.

TREASURER:

This is why we have a strong plan for a stronger economy, and that's what is in this year's Budget, that's what we're putting forward to the Australian people and that’s what we're putting forward to this Parliament and we will be working with this Parliament to see that Budget passed, just like we have with the last two Budgets I've presented.

CASSIDY:

But you have priorities. You could have stuck with the NDIS levy, you could have resisted the tax cuts and produced a surplus. You decided to go another way?

TREASURER:

Well, we believe that too much tax is too much tax, and we believe that if you allow taxes to rise as a share of the economy, to too high levels it suffocates the economy, it weakens growth, it costs job – it costs investment. So we've set a clear tax speed limit in our Budget and that is to constrain just how much tax can be out there and impacting negatively on the economy. That's why that tax relief is there, and that’s why it is there as a plan. Not as some political promise but as a clear plan to deal with real issues in the tax system. Bracket creep, for example, simplicity in the tax system, making it more simple so that over that seven years, 94 per cent of Australians will not face a marginal tax rate higher than 32.5 cents in the dollar. We think that's a big and good change.

CASSIDY:

Obviously we'll come back to that, but again on the surplus and it is wafer-thin to begin with, $2.2 billion, but it may be even thinner than that with a story at the weekend suggesting the illicit tobacco crackdown. You say you’ll pick up $3.6 billion over three years, the Tax Office says half that.

TREASURER:

Well, our figures are based on the Tax Office advice and the Treasury is working with the Tax Office and the key change we're making here, Barrie...

CASSIDY:

But how can it be based on the Tax Office if this story…

TREASURER:

Because that is how Budgets are prepared, Barrie.

CASSIDY:

But this story says the ATO is saying $1.8 billion.

TREASURER:

Well, that story can be that story, all I know is what the advice is that we receive when we put Budgets together, Barrie. That's how Treasury does it, by consulting with the Tax Office and putting these estimates together. The change here is simply this: what it does is it actually moves the taxing point to the border, not in some warehouse where between the border and the warehouse, all sorts of tobacco can leak off the back of the truck and out the backside of the warehouse or anything like that. So, it is about making the taxing point the border and this has been a plan we've been working on for 18 months or so with Michael Andrew and the Black Economy Taskforce. It’s an important integrity measure and it has been well thought through.

CASSIDY:

We go back to the point that Chris Bowen made off the top there. Why would the Parliament sign up to a seven-year tax plan, commit now to tax arrangements seven years away?

TREASURER:

I'm always surprised by this. Why is the Labor Party always prepared to sign up to expenditure into the future forever and ever and ever, but aren't prepared to sign up to tax relief in the future? I think it tells you a lot about the Labor Party.

CASSIDY:

Probably because it's too big a guess to figure out what the economy will be like seven years from now?

TREASURER:

But that applies to expenditure as well, Barrie. If you are prepared to run up expenditure permanently into the future – and they can make that judgment and they did that the other night, spending more money – then why is it that they are never prepared to give people certainty about tax relief into the future? That’s what we are doing. The cost of that is $140 billion over ten years. It’s $13.4 billion over the Forward Estimates and that is a clear setting out of the costs. We are the first Government, by the way, to provide 10-year costings on these significant individual measures. It never happened under the Rudd-Gillard-Rudd Government, it never happened under the Howard Government or indeed under the Hawke-Keating Government.

CASSIDY:

Not year-by-year costings though.

TREASURER:

That has never happened, Barrie. You've been around politics for a long time. You tell me when a government in their Budget has ever provided detailed within year costing post the Forward Estimates and up to the medium term. It has never happened. Chris Bowen hasn't even done it for his retiree tax. So, when people want to apply the same standards to the Government that they apply to the Labor Party, fair enough, but on this score, we have provided, absolutely, the clear costing of this over 10 years and Labor is just looking for an excuse not to provide tax relief to Australians because they don't believe in it.

CASSIDY:

So you are saying to the Parliament that it is unreasonable to ask for year-on-year costings?

TREASURER:

No, the Treasury in fact says that the within year estimates beyond the Forward Estimates are not reliable, but over 10 years you can make a general estimate of the costs which we have done, in the same way that we don't provide within-year estimates as the Labor Party never did on cost for expenditure items. So, Barrie, we've provided more information than the Labor Party ever has and what they are simply doing is looking for an excuse not to give people tax relief because they just want to spend the money. They want to spend people's tax relief into the future and more. That's what Labor do.

CASSIDY:

Why won't you decouple the short-term tax arrangements with the long-term?

TREASURER:

Because it is a plan, Barrie. It is a plan that’s dealing with problems in the tax system. It is dealing with bracket creep. Now, someone who is earning full-time average wages today, they will face higher tax rates in the future unless we deal with bracket creep. Even under what the Labor Party is proposing, if you are on an average wage now, five years from now, you will be paying more tax under Bill Shorten. They don't deal with bracket creep, they don't deal with simplifying the system. See, we have provided a comprehensive plan to deal with problems in the tax system. Bill Shorten has engaged in a political Dutch auction. He can do that, but our plan is set out and it's dealing with real problems and that's why it is a holistic plan. Low and middle-income earners first, bracket creep, simplification, it is a clear plan.

CASSIDY:

Why not deliver to the low income earners now and you have plenty of time to have the argument about the long-term tax cuts?

TREASURER:

It takes one vote, just one, in the Parliament to give Australians understanding about the tax relief they will get over the next 10 years because this Budget is a plan for the next 10 years. It is a plan for a stronger economy over the next 10 years. It is about the economy that Australians are all going to live in, in the next 10 years and we want to say very clearly to them, “we don't want taxes strangling the economy and strangling your job and your wages and this is the plan to do that,” and the Parliament, we’re asking to support that now.

CASSIDY:

Pauline Hanson says it's too far down the track to be voting on the third part of it. If it comes to that, if again you hit gridlock, Labor, the Greens, Pauline Hanson, the rest of them oppose it – you really will deny this tax cut to the low income earners?

TREASURER:

People have always underestimated us, Barrie, when it comes to dealing with the Senate. We've passed $41 billion worth of important savings measures since the last election alone and we will continue to work respectfully and in an engaged way with the crossbenchers. It is a shame that the Labor Party, once again, don't want to vote to provide tax relief to Australians. They simply don't want to do that because they don’t have a tax speed limit. We have one. It is 23.9 per cent. Labor needs to say very clearly what the share of taxes will be of the economy under them because what they're doing, and this is a very important point, and maybe you were going to ask me about company tax cuts. Let's understand this; over the Budget and Forward Estimates, there is not a single cent more, or less, that big companies will pay over the next three, four years. Their tax rate is 30 per cent. It doesn't change until the mid-2020s. So, this idea that somehow big companies will be paying more tax for Bill Shorten is actually a big fat lie. I tell you who will be paying more tax – it is the retirees' tax. That is the single biggest tax measure they have announced. It is over $10 billion over the Forward Estimates. So, it's Mother's Day today. Under the Labor Party on Mother's Day, you will have to go and thank Nanna for paying more tax to pay for whatever Bill Shorten says he is going to be spending it on.

CASSIDY:

In the longer term, that's true, it will be a while before the Labor Party can get its hands on the money you have set aside for the company tax cuts.

TREASURER:

Yes, so it’s retirees who are paying for whatever comes out of his mouth at the moment.

CASSIDY:

Because of the dividend imputation, you mean?

TREASURER:

Yes, the tax refund grab. That’s $10 billion and more over the Budget and Forward Estimates, that's what's paying for what's coming out of the Bill Shorten's mouth. It’s not big companies, it’s not multinationals. They will be paying the same tax under both parties for many years to come. It's Nannas, Nonnas, and Yia Yias who are going to pay the tax for Bill Shorten.

CASSIDY:

And those with lots of negative gearing properties as well.

TREASURER:

Which is one in five police officers who negatively gear, 50,000 teachers, I understand, more than 60 per cent of people on incomes of less than the average wage who actually engage in negative gearing. So, you're right, Barrie, we are not putting taxes up on housing, we are not putting it up on investment, we are not putting it up on savings, we are not putting it up on small businesses, we are not putting it up on family businesses, we are not putting it up on Nanna, Yia Yia and Nonna either.

CASSIDY:

Ok, you put that argument about negative gearing the whole time. How many teachers have five or six properties negatively geared?

TREASURER:

That is such a small proportion of the revenue that comes from negative gearing. It is such an extreme outlier, Barrie and this is what the Left always does. They use the extreme outlier to guarantee a position that otherwise can't be sustained. Police, nurses and teachers, negatively gear their properties, small businesses do it, to ensure they can provide for their future from out of their hard-earned.

CASSIDY:

And the policy is not retrospective so they can go on doing that.

TREASURER:

It’s like driving a car off the lot, Barrie. What do you think it will do to the value of people's homes if the market you sell it into is different from the market you bought it in? When you drive a car off the lot it depreciates in value.

CASSIDY:

Tell me this, why do you allow multiple investments? Why do you allow people to negatively gear 10, 20 properties? If your concern is, as you say, for school teachers, and police officers and the rest of them, why not limit it to two or three?

TREASURER:

Barrie, it's either income people are earning on the basis of making investments or it's not. Let's think about your proposition. If the concern is that what it does to properties in Sydney and Melbourne, which is where the house prices were running at double-digit growth and now are not because of the interventions we've made on the controls on interest-only lending. So, the issue was about curtailing that overheated investor interest – well, that's actually happened. We've already done that. Now, if the issue was that, where do you think the negative gearing buyers are going to go? They are not going to go to Hobart or Perth. They will keep buying the properties in Sydney, Barrie. So, this thing is a hoax, to use Bill Shorten's own term. He is unbelieva-Bill but this is a complete hoax. He told a lie on MediScare at the last election – he told a lie on that. We didn’t sell Medicare you have probably noticed. We were never going to. Now, he is telling people that he is going to pay for their tax relief by taking it off big businesses. That's another lie. Eighty per cent of reversing the Enterprise Tax Plan over the Forward Estimates actually hits small and medium-sized businesses. That’s who it hits. Twenty per cent is just those who go up to the next level which is about $500 million. The big companies don't even come into it over the Forward Estimates. So it’s just another big lie.

CASSIDY:

Well, why don't you put that argument to the two seats in Perth that are now facing by-elections?

TREASURER:

Well, the West Australian division has made a judgment that they are going to focus on a State by-election there at the moment. We know that those two seats, they have been long-held Labor seats, bucking a trend, as you said in your intro, back to 1911, you focus your efforts where you need to and the Western Australian division is focusing it on a State by-election and they are doing that and that's how the Liberal Party works. The divisions make those decisions and they've made that and I think that's fair enough.

CASSIDY:

So, it’s just a pragmatic decision?

TREASURER:

Of course.

CASSIDY:

What do the 42 per cent who voted for the Liberal Party at the last election, what do they do this time?

TREASURER:

They will make their own decisions. We don't go and tell people what to do. We don't do Show & Tell in the Liberal Party, Barrie.

CASSIDY:

Well, you usually do. You ask them to vote Liberal. This time they haven’t got that option. What do they do?

TREASURER:

They will make their own judgements and I trust their judgements.

CASSIDY:

And in Queensland with Jane Prentice losing pre-selection it’s a big call to boot out an Assistant Minister.

TREASURER:

Well, I think Jane has done a great job particularly in the sensitive area of disabilities. I thank her for all her work over many years of serving the people of Ryan but it is a contestable process, politics, and this has been a rank-and-file pre-selection and we're all subject to those as members of parliament. But I remind everyone we had one not long ago when Amanda Stoker was sent to the Parliament, in Queensland, taking over from the former Attorney George Brandis and Amanda, I know, will do a great job and is doing a great job already. Politics is a contestable process and in the Liberal Party there are no quarantines on that.

CASSIDY:

You're still well short of women in Queensland. Is there any prospect the Prime Minister will intervene on this?

TREASURER:

I couldn't see why. It is a matter for the LNP. That's how these things work, Barrie. It is done by the LNP, it is done by the West Australian division of the Party to decide, that's the nature of the Party that we are. It is a contestable process. I feel for Jane, she has done a great job, particularly as an Assistant Minister and I think she has had the great opportunity to serve Australia in the roles she has had and I know she would be very appreciative of that.

CASSIDY:

So even a woman who does a great job can't hang on?

TREASURER:

This is the thing about politics. We all put ourselves forward every three years and if you have a genuine rank-and-file party, then they get to make these decisions about who represents them. I don't recall people getting terribly upset when Amanda Stoker was sent, and nor should they. She is going to do a great job. Jane won't be going to the next election in that role, she has done a great job and we thank her for her service.

Well good morning everyone, my name is Sarah Henderson, the federal member for Corangamite. It is my great pleasure to welcome Scott Morrison here, the Treasurer of Australia for a very exciting day after announcing $20 million for a new international terminal for Avalon airport in this week’s Budget. Of course we’re also joined by councillors from Wyndhum, by Justin Giddings, the CEO of Avalon and by local liberal candidates.

But Treasurer this is an absolutely wonderful week for Avalon, after many, many years and many false starts I have to say under the previous government we are absolutely delighted that Avalon has done this incredible deal with AirAsia which will bring in and out some 400,000 passengers every year to this incredible region. And, of course, create Victoria's second international airport. With our $20 million to construct a new international terminal, this is an absolute game changer. Treasurer, we are absolutely delighted with this investment in what is critical infrastructure for our region, along with another $50 million for our local rail project, $150 million in total. We are hoping to see that matched of course by the state. Our commitment to infrastructure, we all know, is vital in this growing, wonderful region. Again, Treasurer, thank you so much and over to you.

TREASURER:

Thanks very much Sarah, it’s great to be here with you and Justin and the councillors. Particularly all the staff here at Avalon Airport for what is a very exciting day. The Turnbull Government is building a stronger economy. A stronger economy is what guarantees everything else, the essential services that Australians rely on, the ability to provide tax relief to millions and millions of Australians. Not just now but over the next 10 years and ensure that all Australians can benefit from that. It is what is needed to keep Australians safe, it’s what’s needed to ensure that Australians can plan for their future with confidence. What we are announcing here today, in the greater Geelong region and particularly here at Avalon is investing in the infrastructure that will build a stronger economy here in the greater Geelong region. That infrastructure isn't just here at the airport, I should stress, as Sarah was just telling us. We are investing $20 million right here on this site at Avalon for the second international airport in Melbourne. That will obviously create the jobs in the works that take place here, but more importantly it expands this airport's capacity by about 25 per cent. That means more visitors, more business, more jobs, not just here at the airport, but right throughout the greater Geelong region, down the Great Ocean Road, this whole wonderful area, for not only for Australians to come and visit but people from all around the world with the wonderful deal they have been able to do with Air Asia. There is also $50 million going in on top of the $100 million we’ve already put into the Geelong line. That’s fantastic. There is also $50 million being invested around the country in hardening up all of our regional airports, hardening up from a security point of view to keep Australians safe. 64 regional airports all around the country will have their security infrastructure upgraded to ensure we are doing everything we can to keep Australians safe. All of this is made possible by running a stronger economy, by bringing the budget back into balance, by paying down debt, some $30 billion in debt will be paid down over the next four years. $230 billion in net debt paid down over the next 10 years. We have taxes under control, we have spending under control. That is what enables us to come here today and invest what we consider is a very responsible investment in the infrastructure and the economy of the greater Geelong region. I want to particularly commend Sarah Henderson for her advocacy, her passion, her determination to see that we could get to this day and we could turn the sod here this morning. I want to thank the Fox family for their continued investment, passion and vision that they have put into this site over a very long period of time. It is a great partnership. When I was down here a couple of weeks ago I was talking to Lindsay and we were talking about this project, and Justin, we were talking about a partnership, a real partnership. That is what I think today's announcement says. The private sector coming together with the Government sector and ensuring we get this done. Very exciting. Great to be here. Happy take questions.

QUESTION:

Can I just ask specifics, what will that $20 million see out here and how many jobs are we talking?

TREASURER:

Why don’t I let Justin answer that, he is running to project. I could but I think it’s even better to hear from the person who will be running the show.

JUSTIN GIDDINGS:

Absolutely. The $20 million will be used to upgrade and make the terminal larger. We are talking 25 per cent at the moment. We’ve got some planning stuff to get through. It will essentially make a better facility, it will give greater investment in the whole region, we are spending around $25 million to $30 million now in the whole project, and then we’ve got all the fit out so it’s a big project. We are looking at bringing in 500,000 passengers a year from day one. 250,000 people coming in from Asia. It is just going to be fantastic for the region of Corangamite.

QUESTION:

How many jobs have we created?

GIDDINGS:

I think the project is 180 full times jobs ongoing. 190 full-time jobs ongoing. But really when you look at the visitor spend it is over $100 million in visitor spend for the region. That generates thousands of jobs. Avalon is a small part of it really. It’s about the visitors spend in your whole economy.

HENDERSON:

There’s also about 170 jobs throughout the Geelong region. Direct jobs as well, and of course all the indirect jobs. So it is a huge economic boost for the region.

QUESTION:

That was my flow on question, what does this mean for Geelong?

HENDERSON:

What it means for Geelong is everything. As I say, this is an absolute game changer. This is an investment which will, of course, create Victoria's second international airport. A 20 year dream that many of us have been working on. I really do commend the Fox family, Avalon, and of course supported by our Government, the Treasurer, we are absolutely delighted to be making this very substantial contribution. This is one of the most amazing regions in the country. Underpinned by the magnificent great Ocean Road. We will see 500,000 people coming in a year to actually explore our region and Victoria. It will become a very important gateway into Australia.

QUESTION:

We know AMP executives have gone, is it enough to restore trust though.

TREASURER:

That is the long hard road AMP is now on. It is the long hard road for, I think, quite a number of financial institutions. They are now on that. The people I expect to keep them on that road are not only regulators, at APRA and ASIC, with the tougher powers and the tougher penalties we are providing for them and the additional resources, but the boards of these companies. As I’ve said, people have gone, people are going. Some still to go. Those who come on these boards, they are ultimately responsible for making sure these institutions rebuild the trust and reconnect and put their customers first and not only will the Government hold them accountable through all the proper legislation, but I think the Australian people and the shareholders will be keeping them accountable as well, as they should.

QUESTION:

On live sheep export, more MPs are supporting the phasing out of that, are you willing to lose a vote in parliament over it?

TREASURER:

This is an issue which the Agricultural Minister continues to handle very responsibly, patiently and sensibly, working to improve the standards, improve the checks and balances, and work closely with the sector, but more importantly what we are seeing from the Minister is a very tough stance being taken with the sector, in terms of what he expects to happen, he hasn’t minced his words here with them, I think he has been pretty blunt and honest they know what he expects, and they will be expected to deliver. OK, anything else? OK, well it is great to be here in sunny Avalon! (LAUGHS). Everyone come and visit. Great to be here, thank you very much.

Scott Morrison, Federal Treasurer, is in Melbourne this morning not able to come into the studio, but he’s probably drier staying where he is. Scott Morrison good morning to you.

TREASURER:

G’Day Jon. I’m on the freeway here, so in Melbourne. Sorry I couldn’t come into the studio. Would’ve liked to have done that but it’s a busy day.

FAINE:

It certainly is, and it’s going to be a busy couple of months. Bill Shorten last night in his address in reply, the Labor Party are showing that they’re going to put inequality at the very core of the next election campaign and I put to you Scott Morrison, that is indeed your weak spot, your Achilles heel.

TREASURER:

Well Bill Shorten is unbelieva-Bill. He’s just, he can’t be believed, and he can’t even believe even his Parliamentary Members. It’s just rolled-gold…

FAINE:

Could you address the question, inequality is your Achilles heel?

TREASURER:

Well I don’t believe Bill Shorten. You’re saying he’s making a whole bunch of problems about inequality. You can’t trust him. This is a bloke who said he thought company tax should be lower and now he says they should be higher, so they how can they believe him when he says other taxes should be lower. He can’t keep the same position on these things. He just can’t be trusted on it. What people can know from the Coalition, the Liberal and National Parties, is the best way to deliver fairness, the best way to deliver opportunities for Australians in whatever circumstances they are in, is through a stronger economy, which is what our Budget is. It’s a plan for a stronger economy.

FAINE:

They’ve picked up on and magnified the fact that your new tax plan is regressive, not progressive.

TREASURER:

Well even the Grattan Institute doesn’t agree with that. They’ve shown that there’s no real change in progressivity in the tax system for this reason: those on the top rate of tax at the end of the plan pay around 36 per cent of the tax paid in this country, and now it’s 30 per cent. So it actually improves the progressivity. So that just doesn’t [inaudible]…

FAINE:

Sorry I do not, I fail to understand how someone on $41,000, it’s thought to be fair that they pay the same rate of tax as someone on $200,000. How’s that fair?

TREASURER:

So are they rich are they Jon?

FAINE:

$200,000 buys you a standard…

TREASURER:

Is that rich?

FAINE:

…of the median or average or whatever other measure you make of income in Australia…

TREASURER:

It’s about 2.1 times…

FAINE:

Yes that is very well to do. You’re in the top 10 per cent of income earners…

TREASURER:

I accept that, but those who earn $200,000 and over, they will be accounting for 36 per cent of all the tax paid in this country. Now that…

FAINE:

So what?

TREASURER:

is actually more…

FAINE:

So what?

TREASURER:

Jon…

FAINE:

My question is why should someone on $41,000 pay the same rate of tax as someone $200,000?

TREASURER:

Jon the system is still progressive and it means that over the course of their working life, see our plan is for people who are earning $41,000 to earn $45,000, to earn $50,000, to earn $55,000…

FAINE:

I’d love them to earn $250,000…

TREASURER:

I would too…

FAINE:

but the fact is most of them never will…

TREASURER:

And I want to, and over the entire course of their working life, I’m glad you raised that Jon, over the entire course of their working life, under our plan, they will never face a higher marginal rate of 32.5 cents in the dollar. That’s great. Every each hour they take, every extra shift they take, every extra rise they hopefully get, and I believe they will, they will not have to pay more in higher tax rates. Because our tax plan is a plan. It goes over seven years. It addresses the situation for all Australians, and it provides more incentive and more reward. It’s not based on envy and bitterness [inaudible]…

FAINE:

No, it’s tax cuts on lay-by, it’s seven years away.

TREASURER:

Because that’s what’s affordable and we start with low to middle income earners, and we build up through the system. Those on higher incomes, as you say, they have to wait seven years, that’s right Jon. They do. They come last on the tax cuts scale. Well with the plan we have, those on low and middle incomes come first [inaudible]…

FAINE:

The cross benchers seem unmoved by your demand that the tax changes be dealt with as a package. There doesn’t seem to be much movement there.

TREASURER:

Well, everyone predicts things about the Senate Jon. They do it on radio, they do it in the paper, and they say this won’t happen and that won’t happen…

FAINE:

Well we’ve gotta have something to talk about…

TREASURER:

Well I’m sure you do and I know it’s always lively with you Jon, it’s a great program. But my point is this, we have been able to pass $41 billion of savings through the Parliament since the last election, and people said none of that could happen. So let’s just see what happens there. We’re engaging respectfully with the crossbenchers as always, but what you do know, the fact that we’re even talking to cross benchers means that the Labor party is going to vote against tax relief for Australians.

FAINE:

Because they say they have a better plan. You’ve got no year by year…

TREASURER:

But they don’t have a better plan.

FAINE:

You’ve got no year by year cost breakdown of your seven years away tax cut on layby plan. No year by year plan. So if there’s no cost breakdown, why should we believe it?

TREASURER:

Jon, the tax plan for the Budget and forward estimates, the full cost of that is laid out year by year…

FAINE:

The cost is…

TREASURER:

By year, by year, and then over ten years the full cost of the package is $140 billion, and that is what we do estimates on and Budget’s forever. Chris Bowen couldn’t tell you what the cost of his retiree tax is year on year beyond the Budget and forward estimates. I mean he’s in there demanding one thing from the Government, but he won’t actually apply the same rule to himself…

FAINE:

Can we talk about…

TREASURER:

[inaudible] announced a tax plan, and they didn’t actually say what the changes were in the speech. I mean how shifty is that?

FAINE:

If we’re going to talk about things that are missing. Your $5 billion Melbourne Airport rail link. Anthony Albanese this morning described it as a sham, there’s no money allocated, and it’s supposed to be joint-venture between the State and Federal Government financed by some who knows what ‘innovative’ scheme that supposedly is going to generate a commercial return from public transport? What planet are you on?

TREASURER:

Jon, I‘ll have to ask you the same question, and I’m glad you asked that, because let me explain how this works. In last year’s Budget we allocated $75 billion over ten years, which included provisions for projects, which we hadn’t yet confirmed or announced. One of those projects was the Tulla rail. So within the $75 billion we announced in last year’s Budget, and confirmed again in this year’s Budget, there is a $5 billion grant, that’s how it’s being treated, as a grant. $5 billion, real money, to go on the table to build Tulla rail, so $5 billion…

FAINE:

It’s not in the Budget, it’s not your money…

TREASURER:

Jon it is, no it is Jon. The full plan of the $75 billion was provisioned in last year’s Budget as a new measure. Ok? Now in the new Budget, you don’t go and provision it again because you already have. So there’s $5 billion in the Budget in grant funding treatment for the building of the Tulla rail. $5 billion. It’s there. So you can’t say it’s not Jon because you’re just looking at the accounting treatment of something that was announced last year. It’s completely…

FAINE:

Well it’s been announced but whether it actually comes up in the accounts is another thing…

TREASURER:

It is in the accounts Jon…

FAINE:

But what’s…

TREASURER:

And it is. No let me stop you there…

FAINE:

A joint venture…

TREASURER:

No Jon, forgive me. It is completely false for you or Anthony Albanese, or anyone to say that there is not $5 billion fully allocated in the Government infrastructure program…

FAINE:

Ok, I accept your challenge I will go back have a look at last year’s Budget accounts and see whether that stacks up…

TREASURER:

It’s in the $75 billion committed [inaudible]…

FAINE:

If it does, I’ll clarify it. But what’s…

TREASURER:

[inaudible] unallocated funding, it has now been allocated. $5 billion for Tulla rail.

FAINE:

A joint venture with the State government who knew nothing about this and say how do you think you can get return on capital on public transport? No one anywhere in the world can do that.

TREASURER:

Jon, the ultimate arrangement that we put forward and agreed with the State government will be worked out. But what we’re saying is currently, we are treating that $5 billion as full grant funding. Ok? That’s the money. What is clear is that the State Government in Victoria hadn’t allocated that money previously. We actually had. We set aside $5 billion along with $70 billion for other projects last year. You’ll remember it. It was the, we had the National Rail fund. That’s partly where that funding is coming from…

FAINE:

Alright I’ll go back and look at it…

TREASURER:

We announced that [inaudible] dollars…

FAINE:

Our time is limited, a couple of other quick things. $50 million bucks in your electorate to celebrate and commemorate Captain Cook while you slash the ABC. Have you got your priorities right or wrong?

TREASURER:

Yeah well I think one of the most important national stories there are is what happened back in 1770. And it’s not $50 million for a monument, that’s rubbish. That is [inaudible].

FAINE:

No I said to commemorate it…

TREASURER:

No I know…

FAINE:

It’s a celebration, it’s a lot of things…

TREASURER:

No it’s not. No it’s. Commemoration is another program. What was announced for Kurnell is the education facilities, there’s public services and facilities, there’s two wharves that are being built between La Perouse and Kurnell. That’s visitor infrastructure. Indigenous businesses will be benefitting from this public infrastructure at that site. That will ensure that people that come from all around the country, all around the world [inaudible], will be able to go there, and learn the story of the meeting of two cultures that occurred on April 29 1770. That is one of Australia’s most important stories that needs to be told. It’s not just the ABC that tells Australia’s stories. I mean there are places people should go to, and be able to learn and understand our history. Have it told by indigenous Australians, and Australians of other backgrounds, and to be able to, and for young children to be able to go there, we’re building those facilities for them, and there’ll be a new monument there and…

FAINE:

The cuts to the ABC, that’s a straight deal with Pauline Hanson is it for support in the Senate?

TREASURER:

No. The ABC has not been subject to the efficiency dividends for years, and I’m sure the ABC should live within their means, just like every other Australian does.

FAINE:

Alright now…

TREASURER:

And honestly, the sort of response I’ve heard from some, I’m not saying you Jon, but where we’ve applied that efficiency dividend to other government departments and agencies, they’ve just got on with the job of making it happen…

FAINE:

Sure and times when I’d quite like to do a bit slashing and burning around the ABC too but no one ever gives me the opportunity but there you go.

TREASURER:

Send Michelle your plan mate.

FAINE:

[laughs]. That would go down really well…

TREASURER:

[laughs].

FAINE:

The Mormons who have taken up significant numbers of positions on the executive branch of the Liberal Party, seem to want to expel people who are unhappy about the fact that there’s a significant number of Mormons now on the executive of the Victorian branch of Liberal Party.

TREASURER:

Mate I’m a New South Walesman. I know about as much about the internal works…

FAINE:

Well we have [inaudible] going to them too but…

TREASURER:

[inaudible]…

FAINE:

but are they crying that it’s religious vilification…

TREASURER:

Than I know about the Melbourne Storm internal works…

FAINE:

Well they’re calling it religious vilification cos someone described more than those moronic on social media, and they want to expel them for it…

TREASURER:

Well I think, I think…

FAINE:

This is the Party of freedom of speech, section 18c.

TREASURER:

I think that people should have religious freedom in this country. You know I feel very strongly about that Jon. Look I, I don’t like it when I see these sorts of issues sort of transcend into that sort of territory. But look it’s a matter for the Victorian division of the Liberal Party Jon. I’m further north mate so I don’t know much about those things. I’ll leave that to my colleagues, but what I do know is if you vote Liberal, you’re gonna get a stronger economy.

FAINE:

The Hayne Royal Commission into Banking. Do you want it to be extended so it can continue to do its invaluable work?

TREASURER:

Well that’s a matter for the Commissioner. He hasn’t asked to do that. It’s very early on…

FAINE:

No but he’s talking about a nod and a wink. Do you want to get in a nod and a wink right now?

TREASURER:

Well I’ve already said that Jon. I’ve said whatever he would bring forward then the Government would look favourably on that. I’ve said that actually for months now. But Commissioner Hayne isn’t mucking about. I think he’s getting about the task you know very, very efficiently, and very effectively. And he’s cracking the whip and that includes the Government agencies and departments, ASIC, APRA, the Treasury indeed, getting our submissions in and ensuring that we’re you know, fully supporting him in the work that he’s doing, and that’s very important.

FAINE:

If it’s so important and so valuable, why did you announce a cut back and a slash to ASIC at exactly the same time as you’re asking them to do more?

TREASURER:

No well we actually provided an extra $124 million to ASIC. That was done two years ago…

FAINE:

No but you cut [inaudible]…

TREASURER:

Jon what we’re doing, what we’re doing is that we’re waiting for the Royal Commission to report in September and I have no doubt there’ll be additional calls that will be made at that time…

FAINE:

But why did you cut them in the Budget on Tuesday night?

TREASURER:

Jon I haven’t finished yet. Give me a sec. The other thing we have said to ASIC, and this has been between the Secretary of Treasury and ASIC, is if they could set out particular initiatives that they’re looking to do, then this doesn’t have to be in the Budget. We can agree to that additional support any day of the week, and we’re talking to ASIC now about what that might involve…

FAINE:

So will you restore the funding? You’ve taken it away on Tuesday, you’ll give it back on Friday?

TREASURER:

We’re asking. Well that was essentially a roll forward of the baselines. What we’re saying is, if ASIC has particular project needs for things that need to be done, then we’re completely open to that. We’ve told them that. We’ll wait for that submission to come from them, and it doesn’t need to wait for MYEFO or anything like that to do. But that’s what we will do. So if they need more, they will get more. They need to be very clear about what they need it for, and how that’s going to ensure that that enables them to do their job better. We just don’t go handing out money just because people ask. They’ve gotta put it forward and have a plan for how it’s going to be spent. That’s how you spend responsibly. And ASIC will have our support as it has already received with $124 million in additional funding two years ago.

FAINE:

We’ve just shown how efficient we can be. We’ve got through a lot of work in 12.5 minutes. Thank you for your time today.